Get Your Popcorn Ready for Summer Blockbusters

By Travis Hoium | More Articles
May 16, 2011 | Comments (2)

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The previews are over, cell phones have been turned off and the feature film is about to begin. After a horrible start to the year, movie theaters will be hopping for the next three months with a long list of blockbuster films.

Disney (NYSE: DIS ) has a lot riding on its summer sequels to Pirates of the Caribbean and Cars after Mars Needs Moms left investors disappointed. Cinemark Holdings (NYSE: CNK ) and Regal Entertainment (NYSE: RGC ) could also use a summer boost with profits on a slight downslide.

But the two companies that may capitalize most from this summer's films are RealD (NYSE: RLD ) and IMAX (NYSE: IMAX ) who take a slice of every movie ticket sold for their screens. It's a business model that leverages blockbuster films like Avatar or Tron: Legacy, so this summer could be big.

Both companies are hitting 52-week highs almost daily as investors anticipate each movie's premier. Notable movies over the next two months include:

Pirates of the Caribbean: On Stranger Tides, May 20
Super 8, June 10
Cars 2, June 24
Transformers 3: Dark of the Moon, July 1
Harry Potter and the Deathly Hallows: Part II, July 15

Super 8 is the only one of those films that won't be shown in both IMAX and RealD formats. Since it isn't a 3-D film, movie patrons will have to choose between IMAX and standard theaters.

As theater networks grow, RealD and IMAX will take a larger and larger piece of the box office pie. If these movies live up to expectations we should see outstanding earnings from both as a result.

The box office in your living room
3-D for the masses may be taking a step closer to becoming a reality. This morning RealD announced it has completed a license agreement with Samsung on a jointly developed 3-D panel. The partnership was initially announced earlier this year and prototypes were revealed at CES in January. 3-D PC monitors will be launched in early 2012 with 55-inch TVs to follow.

RealD's advantage over IMAX is its potential for offering technology in consumer electronics -- and this is a step in that direction. Users won't have to use expensive active 3-D glasses with this technology, and can instead use passive glasses we're used to at the movie theater.

Keep up on all of our Foolish analysis of IMAX and RealD by clicking here to add them to My Watchlist.

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Fool contributor Travis Hoium has his popcorn ready for the summer movie season and also owns shares of IMAX. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Motley Fool newsletter services have recommended IMAX and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On May 16, 2011, at 6:45 PM, Jayrozz wrote:

Good Article, I pointed this exact sane thing out 3 weeks ago when IMAX was 32.00 after the summer blockbusters hit it'll never look back. Hidden gem IMAX
Report this Comment On May 19, 2011, at 10:54 AM, David369 wrote:

Yes, good job. As more and more movies are 3D, will this mean ticket prices (all of them 3D or not) will creep up as theaters try to recoup "losses" from payments to Imax and RealD? Knowing human nature I would assume so. Even though the "losses" could be argued to not be I figure the fat guy counting the money and making the checks to the 3D partners will look greedily at those checks.
May the power of 3D grow in the theater and at home (and my profits too).

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