This Billion-Dollar Trend Points to Multiple Ways to Profit in the New Year

The economy continues to move back to a pre-pandemic normal. That includes rising travel levels, as well as an increased number of in-person venues.

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  • One area starting to show strength at last: Cinema attendance. That’s thanks in part to Spider-Man: No Way Home, which crossed $1 billion in box office sales on Christmas. While another blockbuster film may take time to reach that box-office prowess, the strength of this film is enough to show that theaters can return to pre-pandemic levels in 2022.

    Some traders see the big winner as AMC Entertainment Holdings (AMC). The movie theater chain capitalized on the popularity of Spider-Man by issuing a non-fungible token offering, or NFT. News of strong box office sales was enough to move shares higher.

    The movie theater chain is up nearly 1,100 percent in the past year as a post-pandemic recovery play. The company is still coming off a steep loss, but a surge higher in shares allowed the company to issue stock and recapitalize earlier in the year.

    Action to take: With shares still about two-thirds off their speculative highs, a return to normal theater attendance could lead to a continued rally into the next year, albeit at a slower rate than in 2021. Investors may like shares here, but be prepared for a lot of daily volatility.

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  • For options traders, the strong box office numbers could make for a surprise profit in the next quarter. An options trade like the June $45 calls, last going for about $5.95, could capitalize on that trend.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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