National CineMedia, Inc. (NASDAQ:NCMI) displays advertisements to U.S. consumers in movie theaters, online, and through mobile devices. Among the many things we like about this company is its healthy dividend yield, strong EBITDA (earnings before interest, taxes, depreciation, and amortization) margins, low capital intensity, and long-duration contracts with leading theater groups. Although the company reported stronger-than-expected quarterly revenue and EBITDA for its fourth quarter, guidance for 2017 was below expectations. Additionally, AMC Entertainment, one of National CineMedia’s largest shareholders, announced plans to divest the majority of its stake in the company in order to comply with the Department of Justice’s Final Order on AMC’s acquisition of Carmike Cinemas. We believe business fundamentals remain intact and therefore continue to hold a position in the stock.
From Meridian Growth Funds first-quarter 2017 shareholder commentary.
