Now Playing: EPR's Junk Bond Tenant Avoids Bankruptcy (Masks Required)

Summary

• As movie theaters begin to open across the U.S., the primary topic of choice comes down to consumer safety.
• These chains have promised to greatly increase cleaning and ventilation, and now require touchless purchases masks.
• AMC appears to be in better shape than expected, at least in terms of avoiding bankruptcy in 2020.
• This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »

One of the most popular articles I’ve written so far during the pandemic is “Now Playing: The Movie Theater Apocalypse.” In it, I noted how:

“This area of experiential retail is one of the hardest hit of all of the industries that we follow…

“We recently published a cautionary article related to EPR Properties (NYSE:EPR), which has roughly 54% exposure to theaters. This is a prime example of a company that will be impacted by the performance of this industry.”

Source: Yahoo Finance

To be fair, EPR shares have modestly recovered during the last 60 days. But they still lag most equity REITs, as illustrated above.

In short, the stock fell much harder at the beginning of the pandemic. As such, it remains around 48% below what it was a year ago.

Compare that to -12.4% for Vanguard Real Estate Index Fund ETF Shares (VNQ).

So does that make it a bargain buy?

To answer that, we should probably start out by looking at the newest information out about it.

One Way to Keep Talking to a Minimum During a Movie

When many movie theaters first began officially talking about reopening, they did so under a “masks maybe optional” understanding.

On Friday, however, that changed with the big dogs, with both Regal Cinemas and AMC (AMC) reversing course completely.

Here’s what AMC’s CEO and President Adam Aron had to say:

“At AMC, we have been consulting with top scientists and health experts to create a broad, sweeping, far-reaching health and safety effort to make AMC Theatres safe for our guests and associates when our theatres reopen in July.”

Their conclusion was for all employees to wear masks, as well as guests in locations that required such accessories.

“In those areas of the country where masks will not be required, we

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.