Top Summer Stocks: IMAX, Callaway, Aaon

BOSTON ( TheStreet) -- Summer is expected to bring unusually hot weather to southern states, according to the Climate Prediction Center. Here are some stocks that could benefit.

3. Aaon ( AAON) makes air conditioning equipment. If summer temperatures rise, as expected in the South, this Tulsa, Okla.-based company will benefit. TheStreet rates it "buy."

Quarter: First-quarter profit decreased 24% to $5.1 million, or 30 cents a share, as revenue dropped 23% to $49 million. The operating margin inched up from 16% to 17%. Aaon has $25 million of cash, converting to a quick ratio of 1.8, and no debt.

Stock: Aaon has advanced 15% during the past year, underperforming U.S. stock-market indices. It trades at a price-to-projected-earnings ratio of 14, a 56% discount to its peer average. The shares are expensive based on book value and sales.

Consensus: Of analysts covering Aaon, two, or 67%, advise purchasing its shares and one recommends holding them. Sidoti & Co. believes Aaon is fairly valued at $24 a share. Since 2007, Aaon has delivered annualized gains of 8%, beating indices.

2. Callaway Golf ( ELY) designs and sells golf clubs, balls, apparel and accessories worldwide. It suffered heavy losses in the third- and fourth-quarter due to poor consumer spending and seasonal weakness. It will profit off of pent-up demand this summer.

Quarter: First-quarter profit tripled to $20 million, or 24 cents, as revenue expanded 11% to $303 million. The operating margin extended from 5.5% to 9.4%. Callaway holds $42 million of cash, equal to a quick ratio of 1.4, and $31 million of debt.

Stock: Callaway has risen 23% during the past year, matching the gain of the Dow Jones Industrial Average. It sells for a price-to-projected-earnings ratio of 13 and a price-to-book ratio of 0.7, 27% and 82% discounts to industry averages.

Consensus: Of researchers following Callaway, seven, or 44%, rate its stock "buy", nine rate it "hold" and two rank it "sell." JMP Group ( JMP) expects Callaway to climb 70% to $14. KeyBank ( KEY) predicts that the stock will rise 58% to $13.

1. IMAX ( IMAX) is an entertainment technology company, specializing in large-format and three-dimensional films. The growing popularity of 3D movies has helped IMAX achieve a three-year annualized profit growth rate of 58%. Summer blockbusters help IMAX.

Quarter: IMAX swung to a first-quarter profit of $27 million, or 40 cents, from a loss of $2.6 million, or 6 cents, a year earlier. Revenue more than doubled. The operating margin jumped from 6.3% to 38%. IMAX has $24 million of cash and $40 million of debt.

Stock: IMAX has more than doubled during the past year, outpacing U.S. stock indices. It trades at a price-to-book ratio of 14 and a price-to-cash-flow ratio of 38, massive premiums to the industry average. It's also expensive based on sales.

Consensus: Of firms rating IMAX, 10, or 71%, advocate purchasing its shares, three recommend holding and one suggests selling them. Roth Capital offers a price target of $26, leaving a potential 53% return. Janco Partners values IMAX at $25.

-- Reported by Jake Lynch in Boston.