Businessweek Archives

Movie boom keeps booming, lifting cinema stocks


I must admit that when my kids turn the dial to the popular Disney Channel show “Hannah Montana,” I make my excuses and hurriedly leave the room. But the show and related merchandise, CDs and DVDs have been a big winner for Disney (Symbol: DIS). Over the weekend, the latest Hannah Montana movie grabbed $34 million and the overall take for the weekend for Hollywood was an estimated $130 million. That’s up 61% from the same weekend last year and the best box office ever for Easter weekend, according to Steve Birenberg, money manager and founder of Northlake Capital Management. The previous weekend was even better at $148 million. In recessionary times, it seems, a night out at the movies is a solid downscaling entertainment bargain.

That’s good news for some of Hollywood’s biggest players like Disney and Dreamworks Animation (DWA) but they are also suffering from cratering DVD sales and lagging theater attendence outside of the United States, Birenberg notes. He prefers cinema operators like Regal Entertainment (RGC), Cinemark Holdings (CNK) and Carmike Cinemas (CKEC). Merriman Curhan Ford analyst Eric Wold also likes IMAX Corp. (IMAX)

, which runs giant-screen theaters around the country.

The group has rallied in recent weeks, thanks to impressive first quarter results, but with the attendence boom still growing, there’s likely more upside there.


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus