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This Week's 5 Smartest Stock Moves

By Rick Munarriz - Mar 21, 2014 at 4:45PM

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These five companies got it right.

If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.

1. Use the force, Luke 
There's little doubt that the highly anticipated seventh installment in the Star Wars franchise will be next year's biggest holiday-season blockbuster, but now we know that Disney's aiming even higher. IMAX ( IMAX -1.18% ) and the family entertainment giant announced a half-dozen Disney movies that will be receiving the big-screen treatment in the next two years.

Three of them will be Marvel superhero releases. Two of them will be ambitious theatrical releases based on Disney properties. However, the sixth and final entry is Star Wars: Episode VII. The movie's going to be huge anyway, but IMAX's premium-priced screenings make sure that Disney will milk more revenue per ticket sold.

2. Lennar: Merely this, and nothing more
It's been a good run for homebuilders, and Lennar ( LEN -0.70% ) kept the good times rolling by posting better-than-expected financial results on Thursday.

Revenue soared 38% to $1.4 billion as a 13% spike in deliveries and a huge 18% jump in average selling price per home boosted Lennar's top line. Earnings per share soared to $0.35 per share, blowing through the $0.28 per share that analysts were targeting. 

There are naturally fears that sales will begin to slow or that prices will stop rising as mortgage rates move higher, but for now Lennar's in pretty good shape, with its backlog of orders up 15% in terms of homes and up 33% in terms of the value of those homes. 

3. Pandora pumps up the volume
Pandora ( P ) remains the country's most popular music-streaming service, cranking out 1.51 billion hours of audio content last month alone. Now it's making sure that folks looking to skip its many ads will pay more for the experience.

Pandora announced that its rate for Pandora One is increasing 25% to $4.99 a month. It's not the first popular online service beginning with the letter "P" to push through a 25% hike -- I'm looking at you, Prime.

The reason a rate increase falls into the "smartest stock moves" column is that Pandora's going about it the right way. It's explaining how its performer royalties alone have climbed 53% since introducing its premium plan, and this is the first increase. Pandora is also grandfathering in existing members at $3.99 -- for now -- and that will help keep churn in check.

4. Come original
Netflix ( NFLX -2.33% ) is probably the next major online platform to increase its monthly rates, but until then it's still living up to subscriber expectations by continuing to pad its growing digital catalog with content that viewers can't catch anywhere else.

Grace and Frankie -- a new sit-com starring Lily Tomlin and Jane Fonda -- will be the next piece of original programming going into Netflix's online arsenal. All 13 half-hour episodes of the first season will be available for streaming globally through Netflix next year.

It's all incremental for Netflix, which continues to take advantage of its growing subscriber base to invest in more content.

5. Pop goes the world 
There will be more soda makers out there fueled by SodaStream ( SODA ) now that KitchenAid is on board. The company that's best known for its stand mixers and dishwashers finally unveiled its Sparkling Beverage Maker, a slick $250 all-metal device that uses SodaStream carbonators to turn still water into seltzer. 

It's a great move for SodaStream, especially after it barely broken even during the holiday quarter given inventory flubs with its soda makers. Having other companies crank out the low-margin starter kits so it can cash in on the spike in high-margin CO2 refills and flavors is a brilliant move.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$602.13 (-2.33%) $-14.34
Pandora Media, Inc. Stock Quote
Pandora Media, Inc.
P
SodaStream International Ltd. Stock Quote
SodaStream International Ltd.
SODA
IMAX Corporation Stock Quote
IMAX Corporation
IMAX
$16.70 (-1.18%) $0.20
Lennar Corporation Stock Quote
Lennar Corporation
LEN
$112.32 (-0.70%) $0.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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