With the recent blockbuster opening of The Incredibles, Motley Fool Stock Advisor recommendation Pixar
Unlike movie studios Time Warner
If you read my recent article on fellow Stock Advisor recommendation Marvel Enterprises
Even though their business models are a little different, the bottom line for Pixar and Marvel is the same. Their success depends largely on making great movies.
Pixar, in fact, relies heavily on box-office gross and ancillary market revenues to drive its profits (and those profits will likely increase since Pixar severed its future relationship with Disney). Marvel's wider character licensing makes its income stream more diversified.
If an investor keeps an eye on who comes and goes from these respective companies' brain trusts, the scripts that get sneak-peeked at places such as Aintitcool.com, and movie trailers, he or she might be able to get a feel for the quality of upcoming releases. One stinker is not likely to sink either company and may even create a buying opportunity. But if you find yourself bored at a movie, chances are other folks will be, too. That's the first tip that it might be time to cut back your exposure.
Currently, however, everything points to continued success for both Pixar and Marvel. That's the kind of story investors love to hear.
Fool contributor Lawrence Meyers has been compared to an animated superhero and owns shares of Marvel Enterprises.