4-Star Stocks Poised to Pop: IMAX

By Brian D. Pacampara | More Articles
June 6, 2011 | Comments (3)

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, jumbo-movie-screen systems maker IMAX (NYSE: IMAX ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at IMAX's business and see what CAPS investors are saying about the stock right now.

IMAX facts

Headquarters	Mississauga, Canada (1967)
Market Cap	$2.34 billion
Industry	Movies and entertainment
Trailing-12-Month Revenue	$220.59 million
Management	CEO Richard Gelfond (since 2009) CFO Joseph Sparacio (since 2007)
Return on Capital (Average, Past 3 Years)	10.4%
Cash / Debt	$17.38 million / $17.56 million
Competitors	Carmike Cinemas (Nasdaq: CKEC ) Cinemark Holdings (NYSE: CNK ) Regal Entertainment (NYSE: RGC )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93% of the 1,525 members who have rated IMAX believe the stock will outperform the S&P 500 going forward. These bulls include ewok2030 and bortman2000.

About a month ago, ewok2030 tapped IMAX as an increasingly international pick: "Expanding in China, Russia, and India and has been successful in the US. China and India have such a large population of what I could see as eager consumers of entertainment."

Over the next five years, in fact, IMAX is expected to grow its bottom line at a brisk rate of 21.5% annually. That's faster than movie exhibition competitors Carmike (6.9%), Cinemark (7.8%), and Regal (3.2%).

CAPS member bortman2000 elaborates on the IMAX bull case:

The average Joe is finally starting to realize how much more superior high definition content is, and is showing his willingness to pay for bigger and better viewing experiences, whether it be 3-D, IMAX, or both.

I have a feeling IMAX screens are going to being showing up more and more across the country in the next several years. My city only has one IMAX theater, and its showings are frequently sold out, even at $18 per ticket.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of IMAX. 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 Fool's disclosure policy always gets a perfect score.

Read/Post Comments (3) | Recommend This Article (3)

Comments from our Foolish Readers

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 June 07, 2011, at 10:49 AM, dmarkiv wrote:

I started watching this stock when I found out it was a Rule Breaker. I am not much of a movie entertainment buff (old fart) so waited until my technical research caught up with the MF. I have just bought in and think IMAX may be OK in these bear looking times. Hoping for at least $43.
Report this Comment On June 08, 2011, at 12:06 PM, nickpohl wrote:

I've ridden it for a double in just over a year, and hoping for more as it becomes the standard. More and more screens with more and more movies, and studios want to have their movies on it. Plus they've reduced costs. Regularly account for 2-5% of all screens for a new showing, but up to 20% of revenue. Lot to like about that.
Report this Comment On July 07, 2011, at 7:21 PM, morningstara wrote:

I own IMAX and have nearly doubled my investment BUT I look at the technology in TV viewing and all the 3-d and high def options and wonder when FILM will be filmed in high def and 3-d WITHOUT the need for any special screen or theater! IMAX would be obsolete. Yes?

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