Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, 3-D movie technology specialist RealD (NYSE: RLD ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at RealD's business and see what CAPS investors are saying about the stock right now.
RealD facts
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Headquarters (Founded)
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Beverly Hills, Calif. (2003)
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Market Cap
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$845.6 million
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Industry
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Movie production
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Trailing-12-Month Revenue
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$149.85 million
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Management
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Co-Founder/CEO Michael Lewis
COO Andrew Skarupa
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Trailing-12-Month Return on Capital
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(49.3%)
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Cash/Debt
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$13.1 million / $94.2 million
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Competitors
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Dolby Labs (NYSE: DLB )
IMAX (Nasdaq: IMAX )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 46% of the 13 members who have rated RealD believe the stock will underperform the S&P 500 going forward. These bears include All-Star TMFDeej, who is ranked in the top 1% of our community, and scoylesays.
Two days ago, TMFDeej explained why RealD didn't seem like a real opportunity: "This money-losing company recently made its IPO. Am I the only one who finds 3D movies annoying? Sure, it's a fun novelty once in a while, but the stuff makes me feel sick and I really don't feel like paying extra for it."
Excited investors, on the other hand, have already paid plenty extra for RealD's shares. The company, which makes 3-D projectors and glasses, raised $200 million in its IPO two weeks ago, which was 33% more than it had expected. While triple-digit sales growth is always nice, the early sentiment in our community is that RealD, with its current level of unprofitability and smoking-hot offering, isn't exactly the safest place for your money.
With rivals like Dolby and IMAX offering far more established ways to play the whopping growth of 3-D, RealD, for the moment anyway, seems just too risky for most value-conscious Fools.
CAPS member scoyle elaborates:
another overpriced ipo. 5 years of losses? highly speculative trade on the bullish side. they are expanding at a huge rate and with their past record of losses makes this a huge risk on the long side. reald's only hope is all these licensing deals will eventually pay off. the only good 3D movie i've seen thus far is Avatar. Toy Story 3 was a great movie in 2D but the 3D version was terrible not even close to Avatar. Unless there is more quality 3D offerings, and RealD can show a profit, I am staying away. i am more bullish on IMAX and [Regal Entertainment].
What do you think about RealD, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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