Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of 3-D movie technologist RealD
So what: RealD shares have been crushed over the past year on worries about the 3-D movie market, but a strong third quarter -- EPS of $0.05 versus Wall Street's expectations of a $0.06 loss -- suggests that those fears are a tad overblown. Management also did a good job managing operating expenses, giving Mr. Market plenty of reason to be upbeat.
Now what: With 3-D versions of films like Star Wars Episode 1, Titanic, and Men in Black III coming up, the short-term momentum should continue. "Looking forward, we are excited about the promising slate of 3-D films in our fiscal 2013 that begins on March 24, 2012, as well as continued expansion within international markets," CEO Michael Lewis said. However, when you couple RealD's less-than-stellar fundamentals with the 3-D fad risk that still remains, the stock continues to be a questionable long-term opportunity.
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