One of my favorite small cap stocks to buy right now is
). There's a lot of hopes in the film industry and on Wall Street
that this is the summer 3D films will at last come into their own.
That means this could be the breakout period for IMAX stock as the
company goes from small cap stock to a big time entertainment star.
The success of 3D films could also consequently help media stocks
Dolby Laboratories Inc.
) which does movie sound systems, and studios like
The Walt Disney Company
Lions Gate Entertainment Corp.
DreamWorks Animation SKG, Inc.
(N ASDAQ: DWA) among others.
But IMAX is far and away my favorite movie stock right now to
benefit from the 3D boom. Here are the details: Imax corporation is
a relatively small company with a market cap of less than $1
billion, but its technology is so innovative that this stock is a
household name. This stock makes and leases projection and sound
systems for over 350 giant-screen IMAX theaters in more than 40
countries. The theaters are owned by commercial operators or
nonprofits like museums and science centers, but owners must pay
maintenance and royalty fees to IMAX for this truly amazing movie
technology. The company's formats include IMAX Dome where screens
reach heights of up to 80 feet, and IMAX 3D where images literally
come right off the screen and into the audience. This is truly the
next step in movie technology.
Recently, IMAX saw phenomenal success thanks to the 3-D sci-fi
movie Avatar that has smashed all previous movie records. The
company is up over 30% so far in 2010 with a lot of potential still
left. The tally for Avatar is currently $2 billion and counting,
with the DVD still selling like hotcakes now that the movie has
moved out of theaters! That makes me incredibly confident that the
millions who have gone to an IMAX theater to see the stunning
Avatar flick will return to see Iron Man 2 and other summer
blockbusters in the same format. This means IMAX will continue to
deliver big profits well into the summer.
That gives IMAX stock a good longer-term outlook on top of what
was a spectacular quarterly earnings report thanks to Avatar. IMAX
stock posted a record earnings report at the end of April that
included profit of $26.6 million or 42 cents a share in the first
quarter, compared with a loss of $2.6 million or 6 cents a year
That's success you can take to the bank. I recommend IMAX for
any investor looking to cash in on the 3D movie craze this
As of this writing, Louis Navellier owned IMAX in his
Emerging Growth newsletter.
Tell us what you think here.
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