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4-Star Stocks Poised to Pop: IMAX

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 7:53PM

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This stock could bring market-beating returns.

Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, jumbo-movie-screen systems maker IMAX (NASDAQ:IMAX) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at IMAX's business and see what CAPS investors are saying about the stock right now.

IMAX facts

Headquarters (founded)

Mississauga, Canada (1967)

Market Cap

$174.28 million

Industry

Movies and Entertainment

TTM Revenue

$103.73 million

Management

Co-CEO Richard Gelfond (since 1996)

Co-CEO Bradley Wechsler (since 1996)

Return on Capital (average, last three years)

(7.5%)

Competitors

Regal Entertainment (NYSE:RGC)

CAPS members bullish on IMAX also bullish on:

Google (NASDAQ:GOOG),

General Electric (NYSE:GE),

Johnson & Johnson (NYSE:JNJ)

CAPS members bearish on IMAX also bearish on:

Citigroup (NYSE:C),

Netflix (NASDAQ:NFLX)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 902 of the 973 members who have rated IMAX -- or 93% -- believe the stock will outperform the S&P 500 going forward. These bulls include stockworldpicks and CAPS All-Star 1stock1.

Earlier this month, stockworldpicks reminded Fools that IMAX recently "announced a five picture deal with Disney (NYSE:DIS) starting with A Christmas Carol in 2009. This is great news for the company and may pave the way for potential partnerships."

In a pitch from late October, 1stock1 tapped IMAX as a super-sized turnaround opportunity:

This is an ideal recession industry, as people trade down from more expensive forms of entertainment to the (relatively) cheap going to the movies. Meanwhile the company has been a good turnaround story for the past several years as they have gotten their house back in order, and transitioned from niche science firms to blockbuster movies. They are continuing to add theaters and growing at a healthy pace. ... They will do great if they can continue to execute well.

What do you think about IMAX, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. CAPS is 100% free, so simply click here to get started.

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. IMAX and Google are Motley Fool Rule Breakers picks. Netflix and Disney are Stock Advisor selections. Johnson & Johnson is a choice of Income Investor. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

IMAX Corporation Stock Quote
IMAX Corporation
IMAX
$16.57 (-1.19%) $0.20
Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$242.70 (-0.58%) $-1.41
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$117.69 (4.68%) $5.26
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$118.84 (-0.72%) $0.86
Citigroup Inc. Stock Quote
Citigroup Inc.
C
$54.00 (1.52%) $0.81
General Electric Company Stock Quote
General Electric Company
GE
$78.90 (2.28%) $1.76
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$167.14 (-2.07%) $-3.53

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

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