Does "Despicable Me 2" Foretell Big Things for DreamWorks Stock?

Animated features have a long history of outperforming. So it should come as only a mild surprise to see Despicable Me 2 beat out not only Grown Ups 2 but also Pacific Rim at the weekend box office.

According to reports, Despicable Me 2 edged Grown Ups 2 $44.8 million to $42.5 million in U.S ticket sales. Pacific Rim, a big bet for both Time Warner (NYSE: TWX  ) and co-financier Legendary Pictures, finished third with $38.3 million at the box office.

Color me surprised by the outcome, even if history says I shouldn't be. Box Office Mojo data shows "animation' as the fourth most common film genre, with 317 films accounting for some $18.2 billion in gross domestic receipts. DreamWorks Animation's (NASDAQ: DWA  ) 2004 blockbuster, Shrek 2, tops the list at $441.2 million.

Despicable Me 2, at an estimated $229.2 million in the U.S. and $472.4 million worldwide, is a similarly huge success for Comcast (NASDAQ: CMCSA  ) and NBCUniversal. Guillermo Del Toro's giant robots and Kevin James' belly flops never really stood a chance against Gru's mighty minions.

The minions are on fire! Sources: YouTube, NBCUniversal.

Next up is Turbo, which, if families continue to frequent animated comedies such as Despicable Me 2, could reap huge sales. The studio's films have generated more than $1 billion in worldwide grosses in each of the past three years. March's release, The Croods, earned $575 million during its theater run.

Presuming Turbo succeeds, is there still opportunity to profit from DreamWorks stock? Not in the short term, I'd say. Shares of DreamWorks Animation are up more than 56% year to date, which suggests investors are already expecting a strong showing from the company's announced movie slate.

Now it's your turn to weigh in. Will you see Turbo next weekend? Leave a comment to let us know what you expect from the film, and whether you would buy, sell, or short DreamWorks stock at current prices.

Or, if you're tiring of the Hollywood glitz and the stocks tied to it all, we've a few more pedestrian (and profitable!) ideas to share in The Motley Fool's special free report "3 ETFs Set to Soar." Just click here to access it now.


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  • Report this Comment On July 15, 2013, at 12:44 AM, TheXMachine wrote:

    I'm not an investor at all, but I'm pretty sure that Universal/Illumination would prefer their stock to rise over Dreamworks, considering Dreamworks is not involved with Despicable Me at all...

    I'm just not seeing how Dreamworks is going to benefit from the success of a different company, unless it's "bandwagon" investment, or false seeding (the author making stock predictions to skew investing).

  • Report this Comment On July 15, 2013, at 1:00 AM, manic2 wrote:

    Maybe it would foretell something about Dreamworks if, you know, it was actually a Dreamworks movie. C'mon now, this is the second time this has happened on fool. Last time you guys said Epic was a Dreamworks movie too.

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