Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, 3-D movie technologist RealD
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
| Headquarters (Founded) | Beverly Hills, Calif. (2003) |
| Market Cap | $1.3 billion |
| Industry | Movie production |
| Trailing-12-Month Revenue | $246.1 million |
| Management | Co-Founder/Chairman/CEO Michael Lewis COO/CFO Andrew Skarupa |
| Trailing-12-Month Return on Equity | (13.2%) |
| Cash/Debt | $16.9 million / $2.3 million |
| Competitors |
Dolby Labs IMAX NVIDIA |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 40% of the 82 members who have rated RealD believe the stock will underperform the S&P 500 going forward. These bears include Clint35 and AcheronRecords.
Just last month, Clint35 noted that RealD's negatives completely outweigh its positives: "This company has two good things going for it. High insider ownership and a good balance sheet. Everything else is bad news."
RealD even sports a particularly lofty forward P/E of 31. That represents a clear premium to listed rivals like Dolby Labs (15), IMAX (21), and NVIDIA (13).
CAPS member AcheronRecords elaborates on the RealD bear case:
3D has been a fad that has been falling in and out of fashion for decades. They rode the wave up, but now with Pirates and Kung Fu Panda 2 showing weak demand for 3D maybe studios will think twice before converting nearly every movie into 3D. I know I drove 15 minutes past the closest movie theater just to see Thor in 2D, and the 4 people we went with agreed that it was worth the drive to avoid the 3D.
Lookout for the dropping share of box office receipts from 3D.
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!
