Universal Pictures, owned by Comcast Corporation (NASDAQ:CMCSA) (CMCSK), has released its sixth installment of its muscle-car franchise "Fast & Furious 6" on May 4, 2013, featuring Vin Diesel and Paul Walker. The movie debuted with $98.5 million in domestic box office revenues and $158 million in international box office revenues in its first three-day weekend.
Universal estimated that by Monday, the end of the four-day holiday weekend, "Fast & Furious 6" will have exceeded $122.2 million domestically and $275.5 million worldwide. That would give it the second-biggest opening of the year behind "Iron Man 3."
The above chart shows the historic performance of the previous 5 movies of the car franchise. As you can see, "Fast & Furious 6" outstripped the previous highest-grossing entries in the franchise. Overall, the "Fast & Furious" franchise has brought in $1.59 billion for the company. These big numbers will rank "Fast & Furious 6" the fourth-highest Memorial Day opening ever. I believe that such a big start for "Fast & Furious 6" will bring massive revenues for the company as well.
About the Company:
Comcast is a global media and technology company. The company has diversified business segments including cable communications, cable networks, broadcast television, filmed entertainment and theme parks. In January 2011, the company acquired a 51 percent majority stake in media corporation NBC Universal from GE, and began the process of purchasing the remaining 49 percent on February 12, 2013, at a cost of $16.7 billion.
Historic Price Performance:
The above chart shows the performance of Comcast's stock price with respect to its competitors, DirecTV (DTV), DISH Network (NASDAQ:DISH), Cablevision (NYSE:CVC) and S&P 500. The stock price of Comcast has also outperformed its competitors' price appreciation during the recovery period, along with the S&P 500. Though these historic results ignore the financial performance of the company, this chart gives you an idea of its performance with respect to its competitors.
The above chart illustrates the company's stock price since May 2012, the period after the acquisition of NBCUniversal. The chart also shows a 20-day simple moving average along with a 2 percent standard deviation. As you can see, when the variation is high, the chances for a bounce back of stock price are greater, as shown in the Aug. 12 - Sept. 12 period. After March 2013, the variation is higher, which means there is a greater chance that the stock price will increase.
The above graph illustrates the MACD line (orange), the signal line (red), and the histogram (or divergence) of the company's stock price. This graph also supports my previous argument regarding the price bounce back. As you can see, the divergence of stock price is below zero or negative, which means there is a greater chance that the stock price will rebound in the coming period.
To analyze the company strength, fundamental analysis is very important.
The above chart shows the revenues and profit margins of the company since 2009. In this period, the company managed to generate consistent revenue growth along with a CAGR of 15 percent. The net margin was down in 2011 due the acquisition of NBCUniversal, and so was its revenue growth. The improvement in margins is a sign of financial strength for the company.
Share buyback and Dividends:
To understand management and the board's confidence in the company's financial strength, long-term growth prospects and commitment to increasing shareholder value, share buyback programs and dividends reflect a pretty good picture. According to the company's annual report, in the year 2012 the company's Board of Directors approved a $6.5 billion share buyback authorization. The company repurchased 96 million shares of Class A Special common stock for $3 billion in 2012. In the year 2013 the company is expected to buy $2 billion worth of shares. The Board of Directors also declared quarterly dividends of $1.7 billion for 2013. In 2012 the company paid dividends of $1.6 billion.
Comcast is a financially stable company with a strong diversified portfolio. The aggressive start of "Fast & Furious 6" is a sign that it will bring strong revenue streams into the company. Furthermore, the technical analysis also supports the fact that the stock price will bounce back in the near future. So there is a great opportunity for investors to avail the opportunity by investing in this stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.