Hollywood`s got a smash hit
The year is off to a raging start as Avatar is set to pass Titanic as the best-grossing movie of all time. Predicting the next monster hit, however, is total guesswork
by Janet Whitman, Financial Post
Particularly appealing are companies with big exposure to 3-D, a technology that has seen its popularity turbocharged by the success of Avatar.
Wall Street analysts particularly like movie studios such as Walt Disney Co. and DreamWorks Animation SKG Inc. and the companies that actually show movies, including Cinemark Holdings Inc., Regal Entertainment Group and Imax Corp.
Disney had a disastrous 2009 in the movie business.
That means the company`s stock could have good upside potential this year, especially because of a shift in emphasis to 3D, with expected hits including Alice In Wonderland and Toystory 3 in its lineup.
"Disney has made 3-D a priority," said Mr. Bank of RBC, who has a "buy" rating on the company`s stock. "It could potentially enable [the company] to gain market share at the box office."
RBC has a 52-week target of US$31 a share for Disney, which traded on the New York Stock Exchange yesterday at US$30.60, down US42¢ for the day.
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