This media company was just upgraded to “buy” at B. Riley & Co. Growth for next quarter is expected in the double-digits, and triple-digits for all of 2015.
DreamWorks Animation (DWA)
from The Primary Trend
We are revisiting a name that has performed quite well for portfolios in the past. DreamWorks Animation (DWA) recently announced a restructuring, including cutting staff by 20% (or 500 jobs), paring the top-heavy management team, and reducing film projects from three to two per
year. CEO Jeffrey Katzenberg stated that the feature-film division was “too ambitious and had fallen short on the creative side. "
Last year, DWA had initial takeover talks with Japan’s SoftBank Corp. and then U.S. toy manufacturer Hasbro, Inc. This accounted for the stock’s move from $20 to $29 in late summer.
2014 was a “throwaway” year in terms of earnings with a number of write-downs eliminating its operating profits. Fourth quarter EPS should also include a $55 million write-off due to the poor performance of Penguins of Madagascar.
DWA has a book value of $16.20 per share, a conservative reflection of its huge and lucrative film library. We believe the stock has been beaten down to an attractive level and that Katzenberg’s ego will drive the company’s earnings and stock price going forward. Initiate positions in DW A common up to $22.
Barry S. Arnold, The Primary Trend, www.primarytrendfunds.com, February 6, 2015