The Smartest TSX Stock to Buy With $500 Right Now

A $500 investment might not look like much, but it can still do real work when you put it into a company with a recognizable brand, room for recovery, and a stock price that leaves space for upside. It’s perfect for investors who want a simple idea with a clear story. Buy a business Canadians already know, then wait for earnings, cash flow, and sentiment to improve.

CGX

Cineplex (TSX:CGX) is much more than a movie theatre chain now. It dominates the Canadian exhibition business, but also brings in money from advertising and location-based entertainment through brands such as The Rec Room and Playdium. That wider setup helps because the business no longer lives or dies on a single blockbuster weekend. It has premium screens, food sales, arcade-style venues, and loyalty ties through Scene+, which give it a few more ways to pull people in and keep them spending.

Over the last year, Cineplex stock also gave investors a few reasons to pay attention again. It renewed its normal course issuer bid in August 2025, giving it the ability to buy back shares, and later sold Cineplex Digital Media for $70 million in cash. Management said those proceeds could support buybacks, debt reduction, and general corporate needs. That’s the kind of housekeeping recovery investors like to see from a company still rebuilding its balance sheet.

There were also signs that the operating story kept moving in the right direction. Cineplex stock expanded its media reach by adding advertising sales for Landmark Cinemas starting in January 2026, while its location-based entertainment segment kept benefiting from newer venues opened in late 2024. Even its early 2026 box office trend looked decent: January box office came in at 114% of the prior year, and first-quarter box office through February was running at 104% of the comparable 2025 period.

Into earnings

Now for the numbers. In 2025, Cineplex stock reported revenue of $1.285 billion, up slightly from $1.275 billion in 2024. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $253.1 million from $250.7 million, while adjusted EBITDA improved to $91.6 million from $90 million. It still posted a net loss from continuing operations of $36.9 million, but that was a major improvement from the $104.2 million loss a year earlier. So this isn’t a fully healed story, yet it’s clearly a better one than it was.

The fourth quarter showed the same mixed but improving picture. Revenue slipped 1.8% to $334.8 million as attendance fell 8.9%, yet spending per guest kept climbing. Box office revenue per patron rose to a record $13.87, and concession revenue per patron hit $9.92. That tells you Cineplex stock is getting better at making money from each visit, even when fewer people walk through the doors.

Valuation is where the $500 idea starts to get interesting. Cineplex stock held a market cap of about $624 million at writing, an enterprise value of about $2.3 billion, a forward price-to-earnings ratio of 20.3, and a price-to-sales ratio of just 0.50. That’s not screamingly cheap on forward earnings, but it does look modest against revenue for a company with a national brand and recovery potential. The catch is the balance sheet still carries weight, including $791.3 million of face-value long-term debt and nearly $967.1 million in lease obligations.

Bottom line

That’s why Cineplex stock fits only if you want a higher-risk recovery stock with real upside. It has improving cash, with cash and equivalents up to $134 million at year-end 2025 from $83.9 million a year earlier, stronger media revenue, growing entertainment venues, and a film slate that could support better attendance in 2026.

But it also still depends on consumer spending and a steady run of compelling releases. For $500, though, that risk looks easier to stomach. You’re not betting the farm. You’re making a small, focused wager on a Canadian comeback story that still has some popcorn left in the bag.

The post The Smartest TSX Stock to Buy With $500 Right Now appeared first on The Motley Fool Canada.

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More reading

• 3 TSX Stocks That Could Bounce First When Sentiment Turns
• 1 Canadian Stock Down 33% to Buy Immediately for Life
• Prediction: The Dip in Cineplex Stock Is a Buying Opportunity, and the Stock Will End 2026 Higher

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.