Still Long IMAX
IMAX is still my biggest bet right now. The market doesn’t seem to be terribly excited about it but I think long term growth will be phenomenal considering the expansion they will have internationally.
I once thought IMAX would fade into the night when the 3D craze died down but I’ve been pleasantly surprised at the share IMAX has kept in theaters. A normal opening weekend announcement from IMAX states that 8% of box office came from IMAX’s 2% of all theaters. One would assume that 8% number would eventually fall to something between 4-6% as moviegoers trade down from the new bigger theaters. But it just hasn’t happened.
Subsequently everyone is trying to get their hands on an IMAX theater and backlog is way up. In fact it will take years for IMAX to build all the theaters they have under contract. Meanwhile revenues will grow 20-30% a year and most of that money is cash in the bank.
Like I said, I’m long and believe strongly in the value IMAX has. Their operating leverage is very positive and I think this could be a $30 stock within a couple of years.
Disclosure: The Mayor is long IMAX.