Big projection
IMAX Corporation (USA) (NYSE:IMAX) is a Canadian entertainment technology company focused on film technologies and theatre operations. The company developed a film format of far greater size/resolution than conventional film systems, which now dominates the large-screen format market, and has displayed strong revenue results for fiscal 2012 (up 21% from the previous year).
Trading at $25, or 41 times its earnings, a massive premium to the industry´s and S&P 500´s average, IMAX Corporation (USA) (NYSE:IMAX)’s valuation may not look particularly attractive right now, although its growth prospects — based on its expanding theatre base and solid international projection — could certainly attract the long-term investor.
The firm’s theater base has been expanding rapidly, thanks to the development of IMAX Corporation (USA) (NYSE:IMAX) digital, a remarkably cheaper format, which now accounts for the majority of IMAX’s theater fleet (currently, 731). The firm plans on expanding to 1700 theatres, with great focus on emerging markets such as Russia (already IMAX’s third-largest market) and China, where a growing middle class seeks new forms of entertainment. IMAX’s recent deal with Wanda — Asia’s largest cinema owner — is a good example of this expansion.
In addition, IMAX Corporation (USA) (NYSE:IMAX)’s greater film quality has made it possible to charge premium prices and hold industry-leading annual per-screen revenue. With plenty of blockbusters expected to hit the large-screens the rest of this year (like the anticipated sequels of “The Hobbit” and “300”), investors won’t need to put on their 3D glass to see IMAX Corporation (USA) (NYSE:IMAX)’s revenues grow.
Bottom line
These three stocks have been behaving differently and would suit different portfolios. If you’re thinking short-term, Sirius XM Radio Inc (NASDAQ:SIRI) could be an interesting buy. But if you’re thinking about the long-term, and don’t fear going against the market, my bet here is on Dolby. An attractive entry point is now available for you to invest in a company that holds a strong financial situation; the firm’s growth prospects, often overlooked, in relation to the rising streaming industry, look good.
The article Do These Media Technology Stocks Offer Opportunities? originally appeared on Fool.com and is written by Damian Illia.
Damian Illia has no position in any stocks mentioned. The Motley Fool recommends Dolby Laboratories and Imax. The Motley Fool owns shares of Imax. Damian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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