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Steve Birenberg, CFA
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Steve Birenberg is founder and President of Northlake Capital Management, LLC. Northlake specializes in managing portfolios for high net worth individuals using a unique strategy combining monthly ETF rotation based on major market themes supplemented by carefully selected media and telecom... More
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Media Talk
  • Box Office Boom Continues 2 comments
    Apr 12, 2009 3:15 PM | about stocks: DIS, DWA, RGC, CNK, CKEC, NCMI

    The weekend box office for the top 12 films was up 61%.  It was the second best April weekend ever, trailing only last weekend.  It was also the best ever Easter weekend.

    The top three films all performed well.  Hannah Montana The Movie met high expectations with $34 million and provided a much needed boost for Disney (NYSE:DIS), which had been in a box office slump.  Fast and Furious held well at #2 given the genre and massive opening weekend.  Monsters vs. Aliens firmed up, falling just 30%, taking full advantage of school vacations on Good Friday.  Dreamworks Animation (NASDAQ:DWA) is now looking at a solid North American performance for the film relative to expectations.

    For the theater stocks, the news is all good.  Look for more estimate increases and higher stock prices for Regal Entertainment (NYSE:RGC), Cinemark Holdings (NYSE:CNK), Carmike Cinemas (NASDAQ:CKEC), and cinema advertising leader National Cinemedia (NASDAQ:NCMI).

    The next two weekends should offer solidly positive comparisons before the summer movie season gets underway the first weekend in May with X-Men Origins: Wolverine which will do well but faces a tough comp from the $98 million opening weekend of Iron Man a year ago.

     

    Themes: media, box office Stocks: DIS, DWA, RGC, CNK, CKEC, NCMI
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  • Michael Comeau
    , contributor
    Comments (132) | Send Message
     
    It's hard for me to imagine a sustained rally for the theater operators. It just seems that investors are convinced that the business will be a slow-motion car crash which hurts the potential for meaningful multiple expansion - even though people will always need some way to entertain their kids, go on dates, etc. I used to be a serious doubter of the movie business, but it's here to stay.
    12 Apr 2009, 06:41 PM Reply Like
  • Steve Birenberg, CFA
    , contributor
    Comments (86) | Send Message
     
    Author’s reply » Hi Michael. I'd argue that multiples remain on the bearish side, betting that it is a slow motion car crash. As more folks realize that the business is here to stay, multiples could expand a bit further. If it is going to happen it will be this year as 2009 appears set to be the third straight good year at the box office. In the long run, upside is limited because theaters are at best a very slow growth business and they do not control the product they sell.
    14 Apr 2009, 10:17 AM Reply Like
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