These 3 Meme Actions Have a Legit Long-Term Benefit

RRemember when meme stocks were all the rage 13 months ago? Investors flocked to the retro chains with big short interest, thin floats and small stock prices. Many of the bottle rockets from last year have fallen back to Earth in recent months, but some of them are at the point where they could have a legitimate advantage now.

Tangier factory outlets (NYSE: SKT), GameStop (NYSE: GME)and AMC Entertainment Holdings (NYSE: AMC) are three stocks that benefited from the meme revolution last year. Let’s see why there are short-term catalysts – no need to bet on dubious conspiracy theories – to trigger a surge.

Image source: Getty Images.

Tangier factory outlets

One of the most unlikely stocks to be swept away by the surge in “meme stocks” last year – outside of perhaps Tootsie Roll — was Tanger Factory Outlet Stores. Shares of the shopping center operator soared 48% in the space of four trading days in late January on its highest volume in more than a year.

Tangier’s appeal in the meme movement largely stemmed from its strong short-term interest. About half of its outstanding shares were sold short as worriers believed people had spent most of 2020 shopping online that they weren’t going to return to physical retailers anytime soon.

The boo birds were wrong. Buyers came back even stronger than before the pandemic. Average tenant sales over the last four quarters – on a same center basis – are 11% higher than they were in the comparable period in 2019. It’s not just buyers who come back. Occupancy levels at its 36 outlet centers have reached a decent 94.3%, closing in on 95.9% two years ago.

Tangier has resumed declaring quarterly distributions that had been halted when the pandemic began, and the payout rate has already been increased. There’s room for improvement on that 4.4% return as well, and we’ll see how the holidays went for Tangier when it releases Q4 results after Thursday’s close.

Friend playing video game on tv.

Image source: Getty Images.

GameStop

The meme stock run poster is trading 74% below the all-time high it reached during its frenzied peak nearly 13 months ago, but all the publicity it has received is giving the retailer some small box video games a better chance succeeding. After years of declining revenue, GameStop is beginning to return within striking distance of its pre-pandemic sales level.

The model seemed doomed as console makers and publishers shift to digital delivery, and it’s a dagger to GameStop’s business and its once lucrative, high-margin resale niche. New blood is thinking outside the console box at GameStop. E-commerce and digital delivery have been in the works for years, but now GameStop is eyeing crypto and NFT as potential mother lodes.

It’s safe to say that everyone is trying to make their mark in the game of digital currencies and collectibles, but GameStop has a birthright here. There is an overlap within the gaming and crypto communities, and people were paying for virtual goods on video games before NFTs and blockchains gained traction. GameStop may not have a lot of window for take that leapbut fortunately, next-gen technology is moving fast enough to make the once doomed retail concept a potential hub for the gaming and fintech universe of the future.

Couples enjoying a movie in a multiplex.

Image source: Getty Images.

CMA

The road back might be longer for AMC, largely because people aren’t going to the movies anymore. Domestic box office receipts are 54% lower than they were at this point two years ago. Only a slim slate of superhero and action movies are pulling in audiences, but those long lines have gotten shorter in the new normal. Studios with streaming services to feed are shrinking theatrical release windows, and we’re spending far more time streaming at home than we did two years ago.

Now let’s start talking about the good news. Analysts estimate AMC’s revenue for the current quarter to be flat with the $941 million it racked up in the first quarter. How is this possible when ticket sales since the beginning of the year have been reduced by more than half? One obvious reason is that the two-year comparisons will start to get much softer next month when we get to the point where multiplex operators close in mid-March. However, to AMC’s credit, it gained market share during the pandemic. The movie pipeline is going to get better as 2022 runs its course.

AMC also helped create its own luck. Concessions mobile ordering dramatically increases what moviegoers order at the multiplex. NFT promotions help AMC stand out from rivals that show the same movies. Like GameStop, AMC is also trying to turn retail investors into retail customers. If you had to bet on which of the cinema stocks will be the last one standing, it has to be AMC. With the recent debt rollover extending its lifeline, it now has time to reinvent the medium. He’s got a shot, and right now it’s worth something.

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Rick Munarriz owns Tanger Factory Outlet Centers. The Motley Fool recommends Tanger Factory Outlet Centers. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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