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Edward Graham is Senior Analyst/Consultant at GALVIN ASSET MANAGEMENT (US) INC., previously responsible for all healthcare positions in the UBS U.S. Small Cap Funds. He has 13 years of buy-side experience in Healthcare with a specialty in Medical Devices and Biotech investing. While at UBS, he... More
  • Imax - People go to movies in tough times to escape reality. 0 comments
    Jun 4, 2009 09:16 AM | about stocks: RGC, IMAX

    IMAX may represent America with its innovation in movies and its overhang of debt obligations.  Recently, IMAX has raised capital through shareholder guarantees and equity offerings to offset its looming debt obligations in 2010.  Can they generate enough earnings to transform itself in into an international icon?

    It has been a long twisting road for IMAX, but they have captured Hollywood's attention with box office records during a recession.  IMAX offers the consumer quality image and sound for a premium ticket price. They have signed an outstanding line-up for 2009, which has hit records so far.
     
    The past is behind them:
      ... $2.5m in accounting errors from 2001 to 2006.
      ... Failed bid to sell the company.
     
    Questions?
    Can they generate a consist level of profitability?
    Can IMAX continue to drive leverage in its relationships with theater chains?
    Can they transfer the cost of filming to the movie production companies?  If they can achieve this, you have a home run stock!
    The most recent $90m equity offering shows that investors are starting to pay attention to IMAX’s success.

    I am long IMAX.

    Stocks: RGC, IMAX
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