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JimVanMeerten (67.33)

Dreams Come True at Dream Works Animation - DWA

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September 07, 2009 – Comments (3) | RELATED TICKERS: DWA

Dream Works Animation is the stock of the day coming up on my BarChart screens. The company is rated a 100% BUY for all three rating periods: short, mid-term and long-term. The stock price has hit 7 new highs in the last 20 trading sessions. Nice addition to any portfolio.

The company develops and produces Computer Generated Animation feature films with 17 films presently on it's shelves. Its major competitors are Blue Sky Studios, Pixar and Walt Disney Feature Animation; all 3 are privately held so this is the only one of the 4 you can invest in.

The Company has profit margins of better than 20% and has maintained that for several years. Although it seems to be a great stock fundamentally, it's even a better buy on technical analysis.

As previously stated BarChart give it a 100% BUY rating on all 13 of its technical analysis indicators. The stock has hit 8 new highs and the last 65 days with an 18.83% price appreciation and seems to have some legs to it to go even higher.

It's a buy at this price and you should fells save with a stop loss at 30.

Addition Information:
Financial Tides
BarChart

Dream Works Web Site

 

3 Comments – Post Your Own

#1) On September 07, 2009 at 3:12 PM, Teacherman1 (62.24) wrote:

I am not familiar with DreamWorks as a stock, but very much so as a company.

My question is, where do you think it will go, when will it get there, and why? Well, I quess that was 3 questions.

They don't pay a dividend, so there is no premium for holding.

They are at their high now, so is there a reason to think they have a lot more room to grow?

They are a great company in the sense that they have a great product and good people, but what is going to make them double, or even triple in the longer term/

Thanks for the post. 

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#2) On September 08, 2009 at 10:57 AM, JimVanMeerten (67.33) wrote:

I'm not a person that thinks I'm so smart that I can predict what will happen.  I observe what IS happening and follow it.  I put in stop losses at about 10% below the recent high and sell if the stock breaks below its 50 Day Moving Average.

No crystal ball but I closely watch it price action.

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#3) On September 10, 2009 at 1:32 PM, MethodlessMan (72.37) wrote:

I have done research on it, and I am very ticked off at myself for not pulling the trigger when I saw it for $25.82

I thought they would miss 2Q earnings and I could get it on an even lower dip. Never try to catch a falling knife! I never learn it seems.

Anyway, one of the reasons they are not paying dividends is probably that there is a bonus for the CEO based on the stock price (I believe if it hits 36 by a certain date) - until that date, I doubt we'll see any dividends.

That having been said, anything ever again as big as Shrek 2 will cause this stock to explode.

If they miss 3Q earnings (see? I never learn) I'm going to buy. They have nothing in the works for 2Q and 3Q, which is why I am anticipating missing earnings, but are coming out with animated TV shows for 4Q this year.

Starting next year they will be making 5 movies every 2 years, increasing revenues by at LEAST 15%, and I don't think expenses will increase by the same margin.

I should probably make this my pitch on Caps...

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