There are many stocks still hurting in 2020, in large part because their companies had a hit during the pandemic. Some will jump back. Some will not. I realize that there are two curves of these priorities. On the one hand, you have interrupted it – these are companies that are temporarily delayed, but have to jump back when the pandemic and recession are likened. Then you have the disturbed: companies for which the contradiction is not temporary.
I feel that AMC Entertainment Holdings (NYSE: AMC), Carnival (NYSE: CCL), en Simon Property Group (NYSE: SPG) are market leaders in industries that are disrupted. I do not believe that cinemas and shopping centers will ever return to their former glory. The cruise industry could rebound into consumer, but it will not happen soon. Let’s go over all three stocks that I will not be recovering from next year.
Image Source: Getty Images.
AMC Entertainment
After more than five months, AMC opened about 100 of its multiplexes last weekend. His younger peers also followed suit. You would think that would be the crazy question after a trip back to the movie house, but that was not the case. Less than a million people (or 0.3% of the country) went back to see a movie over the weekend.
It will go better. Movies that people really want to see will start in the coming weeks. But it will not only be safety concerns as well as mask requirements that will keep most people away from the angle multiplex. The migration to streaming premium entertainment at home has grown over the past five months. We have proven that we can pay $ 20 or more for a new release seen from the comfort of home – and the studio does not have to split the box office with an exhibitor.
AMC will put up better numbers than this past weekend as it opens more screens and better movies arrive. However, I do not know if we will see the ticket sales of 2019 (or another previous year for that matter) as a reboot.
Carnival
The travel industry will take a long time to bounce back, and the cruise lines will bear the brunt of the conflict. Cruise ship operators do not have much choice. Offers from the US that are leaving will not leave until at least November, and we are already seeing selected trips from some of Carnival’s smaller lines to next year.
Analysts increase their projected losses for the sector in 2021. Three months ago, Wall Street professionals thought Carnival would earn $ 1.48 per share in fiscal 2021. Two months ago, the forecast moved to a loss of $ 0.87 per share, and now it’s all the way to a loss of $ 2.44 per share. Delaying restart dates, reducing the number of ships in their fleet, and consumers re-examining what the cruise experience will be like with masks and social distance make it a hard sell in the short term.
As the world’s largest cruise line, Carnival cannot be completely canceled in the long run. Consumers may embrace various holiday modes next year (or possibly just stay closer to home), but sea voyages will inevitably return. This is just a repeat process that will take years, and Carnival share will probably not bounce back until the sector’s prospects improve.
Simon Property Group
The mall died before the pandemic, and COVID-19 has just accelerated the migration to e-commerce. Simon Property Group is a giant mall operator structured like REIT, but a landlord is only as good as its tenants’ ability to pay – and these are scary times for bricks and mortar. A lot of chains are knocking, and the survivors are getting better at online sales which will make the paid stiff shopping center renters less needy in the future.
There’s a lot going on for Simon as a dividend payout with her current return of 7.8%, but is that sustainable? Revenues were well below analyst expectations in back-to-back quarters. Retailers are trying to lure their tenants by actually bidding on bankrupt chains, but does that make sense to you? It is at best a conflict of interest. In the worst case, it jumps out of the frying pan and into the dry sand.
