1-Star Stocks Poised to Plunge: Regal Entertainment?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, movie theatre operator Regal Entertainment (NYS: RGC) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Regal's business and see what CAPS investors are saying about the stock right now.


Headquarters (founded)Knoxville, Tenn. (2002)
Market Cap$2.2 billion
IndustryMovies and entertainment
Trailing-12-Month Revenue$2.7 billion
ManagementCEO Amy Miles (since 2009)
CFO David Ownby (since 2009)
Return on Capital (average, past 3 years)10%
Cash/Debt$253.0 million / $2.0 billion
Dividend Yield6%
CompetitorsAMC Entertainment
Carmike Cinemas
Cinemark Holdings

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 22% of the 190 members who have rated Regal believe the stock will underperform the S&P 500 going forward.

Earlier this month, one of those Fools, All-Star elkwingcaddis, succinctly summed up the bear case for our community:

Movie Theaters will slowly [go the] way of Blockbuster as Home Theater System prices drop and on-demand and streaming makes it easier to order movies at home. Could add other theaters but [Regal] seems to be seeing a larger drop in reveneues than others and has a high PE ratio and high dividend payout. If they have to cut their dividend in the future it would significantly impact their price.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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