A softer-than-expected performance for Mr. Peabody & Sherman has some investors selling shares of DreamWorks Animation SKG (NASDAQ:DWA). That's a mistake, Fool contributor Tim Beyers says in the following video.
The stock is down about 3.4% over the past week and more than 18% year-to-date. If only executives at distributor Twenty-First Century Fox (NASDAQ:FOXA) had Mr. Peabody's famous WABAC Machine. They could go back in time and boost their marketing push for this latest try at developing a new animated franchise for the DreamWorks/Fox team-up.
Or maybe it wouldn't have mattered. Mr. Peabody & Sherman cost $145 million to produce, putting box office break-even at $580 million in worldwide grosses. Only eight of the 28 DreamWorks Animation-produced epics tracked by Box Office Mojo have reached that plateau. And of those, only two were franchise openers: 2008's Kung-Fu Panda and 2013's The Croods.
Tim says the sell-off in DreamWorks stock is still undeserved.
Mr. Peabody & Sherman gets strong ratings from audiences at Rotten Tomatoes, earning a covered "A" CinemaScore. That should help build buzz for the film and boost walk-in traffic in the coming weeks. The stock, meanwhile, trades for less than half the long-term earnings growth rate analysts expect -- a bargain that won't last forever.
Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google, and Netflix at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
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