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Jazzy33 (22.93)

Eye-ing Imax



December 29, 2008 – Comments (0) | RELATED TICKERS: IMAX , CNK , RGC

One thing that Warren Buffett looks for when selecting companies is whether or not a company is able to stand tall in the face of opposition. He calls this having a durable competitive advantage. IMAX, the larger than life movie screen creator, seems to fit this criteria. Sure there are a multitude of other cinemas and movie theatre chains chiming for our entertainment dollars such as Regal, Cinemark (CNK), AMC and Carmike (CKEC) to name a few. But the beauty of IMAX is that they can make seeming competitors, allies with the simple stroke of a pen.

Earlier this year IMAX signed a deal with Regal Cinemas which allowed them to install 31 new projection units within 20 U.S. markets.  What's incredible about this move is that, according to Yahoo Finance, one of IMAX's chief competitors is the parent company of Regal Cinemas, Regal Entertainment Group (RGC). I don't know about you but I have a hard time finding a better competitive advantage that a company could have than to be considered a chief competitor of a company that literally puts greenbacks into IMAX's pockets.

I don't know if IMAX is on Mr. Buffett's watch list or not, but I suppose He would appreciate their ability to join up with rivals in an effort to make a buck, or a few hundred thousand of them for that matter. Regardless, in my own humble opinion, there are not many competitive advantages that can get much more durable than that.

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