Theater Stocks Are Having A Blockbuster Year

Theater Stocks Are Having A Blockbuster Year

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The likes of NetFlix, HBOGo, VideoOnDemand and free and easy downloading of content from the Internetwere all supposed to spell doom for the brick and mortar Movie Theater, right?

Not so fast.  The performance of the movie industry this year indicates that the demise of the box office has been far overblown.  With studio hits like The Avengers, Men in Black 3, and Snow White and the Huntsman all bringing in major business to movies houses across the country, year to date box office sales are up a remarkable 16.5% over 2011, posting the strongest ticket sales in six years.  With large-scale productions like The Amazing Spiderman and The Dark Night Rises due out this summer and literary hits like The Hobbit and The Great Gatsby set to hit screens before the holiday season, one would expect the strong earnings trend to continue.

The rebound in the industry has been reflected in stock prices and has been noticed by international investors as well.  Regal Entertainment, the largest movie chain in the United States, has seen its stock price rise twenty percent in 2012, far outperforming all benchmarks.  Additionally, just yesterday The Wanda Group, the largest theater developer in China, announced plans to spend $2.6 billion to purchase AMC, the second largest chain in the United States, and an additional $500 million to improve its theater-going experience.

Although all indications point to strong performance continuing through the year, now may not be the time to invest in the movie industry as assets have already experienced a recent and rapid increase in value.  However theater companies deserve credit for turning things like social media into effective tools for marketing their products and have emerged as a relatively cheap outlet for family entertainment during still uncertain economic times.   This year has proved that movie going is alive and well and any projections to the contrary were premature.

Business Section: Investing Ideas

Think movie theater stocks have more upside to price in? Or simply want to keep track of the key players? Here’s a list of stocks that stand to benefit (or have already fully benefited) from this year’s blockbusters.

As mentioned previously, movie theaters are very dependent on box-office hits, so be warned that a less successful 2012 can mean a bit slump from current valuations.

Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:

“1. Carmike Cinemas Inc. (CKEC, Earnings, Analysts, Financials): Operates as a motion picture exhibitors in the United States. Market cap at $237.14M, most recent closing price at $13.39.

 

 

“2. Cinemark Holdings Inc. (CNK, Earnings, Analysts, Financials): And its subsidiaries engage in the motion picture exhibition business. Market cap at $2.54B, most recent closing price at $22.15.

 

 

“3. DreamWorks Animation SKG Inc. (DWA, Earnings, Analysts, Financials): Engages in the development, production, and exploitation of animated feature films and characters worldwide. Market cap at $1.44B, most recent closing price at $17.15.

 

“4. Lions Gate Entertainment Corp. (LGF, Earnings, Analysts, Financials): Engages in the motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, new channel platforms, and digital distribution activities. Market cap at $1.82B, most recent closing price at $12.66.

 

“5. Reading International Inc. (RDI, Earnings, Analysts, Financials): Engages in the development, ownership, and operation of entertainment and real property assets in the United States, Australia, and New Zealand. Market cap at $137.45M, most recent closing price at $5.61.

 

“6. Rentrak Corporation (RENT, Earnings, Analysts, Financials): Provides content measurement and analytical services to companies in the entertainment industry. Market cap at $173.26M, most recent closing price at $15.68.

 

“7. REGAL ENTERTAINMENT GROUP (RGC, Earnings, Analysts, Financials): Operates a theatre circuit in the United States. Market cap at $2.03B, most recent closing price at $13.09.

 

 

“8. RealD Inc. (RLD, Earnings, Analysts, Financials): Licenses stereoscopic three-dimensional or 3D technologies internationally. Market cap at $614.25M, most recent closing price at $11.25.

 

 

“9. IMAX Corporation (IMAX, Earnings, Analysts, Financials): Operates as an entertainment technology company worldwide. Market cap at $1.32B, most recent closing price at $20.10.

 

 

“10. Walt Disney Co. (DIS, Earnings, Analysts, Financials): Operates as an entertainment company worldwide. Market cap at $79.36B, most recent closing price at $44.40.

 

 

(Written by Daniel Connelly. Data sourced from Finviz.)

 

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4 Responses to “Theater Stocks Are Having A Blockbuster Year”

  1. What about Theater REIT Entertainment Properties Trust (EPR)? (disclosure – I own it in my IRA).

  2. Anonymous says:

    How about a historical study on the performance of theatre stocks during past recessions?

  3. This year has proved that movie going is alive and well and any projections to the contrary were premature.

  4. juan achi says:

    Licenses stereoscopic three-dimensional or 3D technologies internationally. Market cap at $614.25M, most recent closing price at $11.25.

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