Yesterday I got to thinking about the huge blockbuster season that happens in Hollywood every summer, and starts this month with the release of Iron Man.
May is traditionally the month the biggest films of the year come out. I’m talking about the huge movies like Transformers, Star Wars, and of course this summer’s Iron Man.
Marvel, the entertainment juggernaut behind Iron Man and also the upcoming The Incredible Hulk is set to make a killing on these two movies. The hype machine has been hard at work for Iron Man but not a lot has come forth about The Incredible Hulk except for a few interviews with stars Tim Roth and Edward Norton. Both films look amazing but what does it mean for Wall Street. Can Marvel make you some money this summer?
Marvel Entertainment Inc. (NYSE: MVL) is a multi-media company. They make movies, comics and video games. Most people are familiar with their Icons like Spider Man, The Incredible Hulk, The X-Men and Iron Man. They also license these properties out to video game makers and television producers. Franchising is a major part of any entertainment company and Marvel is going to cash in this summer. There’s both an Iron Man game and a Hulk game coming out and new comics for both of these characters are already on shelves.
The stock is trading at 18 times earnings and looking at about 10% growth over the next year. At $30 a share it’s nearing the 52 week high once again and should it break that level we could be looking at a $40 stock. The average 10 day volume is around 700k shares so its thinly traded and not very volitile. They also don’t pay a dividend but the 52 week low was only $21. With a 10 point swing in either direction this is a solid performer and I see a short term price of $32 before the stock is even value. I don’t normally recommend buying a stock after it has run as much as this has, but I do see some opportunity here for a quick profit.
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