Dreamworks Animation Skg Inc (NASDAQ:DWA) stock is on a recent run as it recently reported a quarterly profit, and a beat of $0.04 per share, but the stock still trades at less than 50% of its price from two years ago. The primary reason for Dreamworks Animation Skg Inc (NASDAQ:DWA) stock decline was a “hit” slump, and its recent rally was on the expectation that things were turning around. I think buying call options that don’t expire for a while is a good, risk controlled, way to play this high reward swing. You can limit your downside and if the hits come, you may have a double. It can be stressful waiting for “hits” to take off, but at least you know what the catalysts definitely will be.
Last year Dreamworks Animation Skg Inc (NASDAQ:DWA) lost $.43 per share but this year it is expected to earn a profit of $.84 per share, a tremendous turnaround. If that growth actually happens, and if the company grows each of the next two years as expected, a double could be in the works.
Above and beyond
It may seem like an odd transition, to go from movies to Bed Bath & Beyond Inc. (NASDAQ:BBBY), but I couldn’t have this “old school” conversation without adding this company to the mix. In my opinion there’s nothing lazier then to lump all brick and mortar retailers together as “Amazon bait,” but that’s exactly what analysts have done with their negative outlook for Bed, Bath & Beyond. It’s also been terrible investment advice, Bed Bath & Beyond is up nearly 20 points this year.
The company is a beacon of hope for a new brick and mortar future. Retailers simply can’t survive in the age of e-commerce unless they offer a unique experience, but that’s exactly what the company does so well.
Have you ever been in the place? I’ve been hooked since my first visit. They have literally every gadget that a person they could ask for in their home, from space foam pillows, to rotating massage chairs, all in one place. Bed Bath & Beyond has always seemed to me like the place that Bruce Wayne would shop at, if he were real, and the numbers back it up.
Earnings have grown 16.8% annually since 2007 and revenues have grown nearly 10%, right through the Great Recession. The company trades at a forward P/E ratio of just 12, and now owns World Market (10% of sales), which I believe fits their “unique retail experience” strategy well. I like this company, especially at these valuations.
When movies and soda-making machines meet
The funny thing is, these businesses–movies and BBBY–actually have one very big thing in common. The same reason that BBBY has withstood Amazon is why the reason why Man of Steel is a box office hit. The movies, like Bed Bath & Beyond, offer unique experiences that can’t be duplicated by cheaper or more convenient alternatives.
In short they’re doing what “old school” businesses need to do to remain future proof, and they’re doing it quite well.
Adem Tahiri has no position in any stocks mentioned. The Motley Fool recommends Bed Bath & Beyond and DreamWorks Animation (NASDAQ:DWA).
The article These 4 Stocks Are “Future Proof” originally appeared on Fool.com.
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