Investors like to think — or at least hope — that stock prices go up over time.
Sometimes, however, even high-quality businesses undergo slumps that undo much of the appreciation in the value of their shares.
If you missed out on these three stocks before the last rally, then here is your opportunity to reverse the clock to 2014, or earlier, and ride these stocks back to their previous highs.
Fear not, dear investor, if you own shares in the companies that we will be discussing today — these stocks all have moat-like characteristics that will ultimately see them return to their former glory.
Turn your cellphones off and enjoy the show
Cineplex (TSX:CGX) hovered around its current price from 2011 to 2012.
Formerly a market darling, the media company peaked in 2017 at around twice today’s price.
Broadly speaking, Cineplex has been down in the dumps because there simply haven’t been enough box-office hits.
Compare the films of an explosive year such as 2015 to last year’s and it becomes evident that we have recently been through a drought of blockbusters.
But 2019 is different.
Avengers: Endgame’s wild success is only the beginning of a year full of highly anticipated sequels and Disney remakes.
Looking at the numbers from Q1, all of the pieces are in place: Cineplex has nearly 10 million SCENE members; box-office revenue per patron is on the rise; and, concession revenue per patron is increasing.
While waiting for the company to turn the ship around, you get to collect a dividend that now yields over 7%.
UberEats yourself a bag of popcorn and watch the monthly income roll in.
Save up for a chalet in the Laurentians
Laurentian Bank (TSX:LB) has bounced back from a horrendous end to 2018, but remains roughly as cheap as it was when it hit lows in 2013 and 2016.
Between last year’s mortgage loan review issues and an ongoing restructuring that has most recently seen the elimination of bank tellers, investor confidence in the bank has been iffy at best.
All of the aforementioned noise has left Laurentian trading below book value, at about 10 times earnings, and with a nearly 6% yield.
Add to the equation that earnings are steadily growing and that the dividend has consistently added a couple pennies per year, and it isn’t hard to see the bank gradually grinding back toward previous highs.
Cheers to amazing value
Molson Coors Canada (NYSE:TAP)(TSX:TPX.B) is on sale at 2014 prices, which is around half of the highs that the stock hit in 2016.
Investors seem convinced that marijuana legalization will fundamentally disrupt the alcohol industry.
Here’s the thing: Molson already has a deal in place with Hexo Corp. to produce cannabis beverages when the market permits.
Further, North Americans consumed more than 25 billion litres of beer in 2016; it would take a whole lot of marijuana converts to significantly change the enormous beverage industry that is currently in place.
Right now you can pick up Molson shares slightly below book and at only 12 times earnings. The company’s dividend is growing and yields almost 4%.
