Third Point Management, a New York-based investment advisor, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Third Point Offshore Fund returned nearly 4% in the third quarter bringing YTD returns to 14%. The performance of global equity markets remained robust, although returns were fueled by a far wider range of the market than in the preceding year and a half. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Third Point Management highlighted stocks like Cinemark Holdings, Inc. (NYSE:CNK) in the third quarter 2024 investor letter. Cinemark Holdings, Inc. (NYSE:CNK) is a movie theater operating company. The one-month return of Cinemark Holdings, Inc. (NYSE:CNK) was 5.99%, and its shares gained 83.80% of their value over the last 52 weeks. On October 22, 2024, Cinemark Holdings, Inc. (NYSE:CNK) stock closed at $28.47 per share with a market capitalization of $3.484 billion.
Third Point Management stated the following regarding Cinemark Holdings, Inc. (NYSE:CNK) in its Q3 2024 investor letter:
“Earlier this year we took a stake in Cinemark Holdings, Inc. (NYSE:CNK), the third largest movie theater chain in the U.S. We believe Cinemark is poised for underappreciated growth over the next few years as the supply of theatrical releases rebounds from pandemic- and strike-related headwinds. In addition, we believe Cinemark will gain share from undercapitalized competitors. There is no shortage of skeptics about the move theater business. In 2020 the outlook for domestic cinemas looked bleak: the rapid rise of streaming, combined with behavior changes from the pandemic, cast doubt on whether people would ever go to theaters again. Regal Cinemas filed for bankruptcy. AMC became a meme stock.
Against this inauspicious backdrop, Cinemark has demonstrated resilient financial performance. Consider that in 2023, counterintuitively, Cinemark reported higher free cash flow than they did in the two years prior to the pandemic. Yet, Cinemark stock entered 2024 trading 70% below pre-pandemic levels (a mid-single digit multiple on trailing 12-month free cash flow), suggesting market participants feared free cash flow would drop precipitously and never recover. We disagree with this view and believe the multi-year outlook for Cinemark has never been more robust…” (Click here to read the full text)
A ticket booth outside a theatre, directing customers to the films of the day.
Cinemark Holdings, Inc. (NYSE:CNK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Cinemark Holdings, Inc. (NYSE:CNK) at the end of the second quarter which was 35 in the previous quarter. In the second quarter, Cinemark Holdings, Inc. (NYSE:CNK) reported $734.2 millions of total revenues and $142.1 millions of adjusted EBITDA. While we acknowledge the potential of Cinemark Holdings, Inc. (NYSE:CNK) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Cinemark Holdings, Inc. (NYSE:CNK) and shared Carillon Chartwell Small Cap Value Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.