This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Under the Radar: Marvel Banks on Box Office

"Under the Radar" is a daily feature that uncovers little-known companies worthy of investors' consideration. Check in at 5 every morning to find out about stocks that tend to beat their bigger brethren.

NEW YORK ( TheStreet) -- Marvel Entertainment (MVL) shares have climbed 35% since I rated it "buy" on Dec. 16, rising twice as fast as the S&P 500 Index. Despite the sound gain and the company's weak second-quarter performance, I remain optimistic about its prospects.

On Aug. 4, the company said its second-quarter earnings dropped 38% to $29 million, or 37 cents a share, as revenue fell 26% to $116 million. Its operating margin deteriorated from 54% to 42% and its net margin declined from 30% to 25%.

The weak quarterly results have pushed shares down 5.5% in the past two days, and the stock may have further to fall. But based on price, growth potential and financial strength, Marvel is an outstanding company and should be added to any growth investor's watch list.

Marvel became a standalone film studio in 2008. The conversion allowed it to maximize profits on the highest-margin film genre: superhero flicks. The company has a vault of 5,000 proprietary characters and a built-in fan base from its comic-book business.

Its latest box-office release, Iron Man, grossed $585 million worldwide. The film has garnered praise from moviegoers and critics, earning a 93% approval score from movie-review Web site Rotten Tomatoes. Iron Man proved that movie success starts with good storytelling. Special effects should complement the plot, not be the plot itself.

Now that Marvel is creating its own films and distributing them with the help of Paramount Pictures, its stock is more sensitive to box-office earnings. A bomb could stifle earnings, but a hit could make the shares jump.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $113.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%
TSLA $248.48 0.00%
YHOO $33.14 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs