The stock market fell on Friday as the third quarter came to an end amid continuing concern over a slowdown in the global economy and the European sovereign debt crisis. These issues are not going away any time soon. Investors need to find quality companies, follow the stocks, and take positions only when there is a significant dislocation in the valuation from fundamental value.
Here are several ideas to put on your watch list.
Carmike Cinemas (CKEC) is a motion picture exhibitor with theater locations in small to mid-sized markets with populations of fewer than 100,000. As of December 31, 2010, Carmike had 220 theaters and 2,103 screens on a digital-based platform, including 596 screens with 3-D capability.
Carmike had strong second-quarter earnings, and at $6.19 per share is trading at 6.1x LTM EBITDA. Over the past 12 months, Carmike has generated over $34 million in free cash flow -- a staggering 40% FCF yield. Carmike is making good use of the cash and is gearing up to grow. Recently Carmike announced both the acquisition of several theatres and the construction of another. The acquisition is likely not reflected in 2011 and 2012 expectations.
Further, the North American box office had a strong third quarter. Boxofficemojo.com data shows third-quarter revenue was up more than 6.5% versus the third quarter of 2010. Further, the movie slate for the fourth quarter of 2011 is very strong, suggesting further box office growth that should continue well into 2012.
FXCM, Inc. (FXCM) is an online provider of foreign exchange trading and related services. The company offers access to over-the-counter FX markets through a proprietary technology platform. The platform offers price quotes on up to 56 f/x currency pairs from up to 25 global banks, financial institutions and market makers, or FX market makers, allowing customers to trade f/x.
