Let’s get this out of the way. We’re not worried about Apple (AAPL) at all. The company is sitting on a mountain of net cash and is simply a free cash flow machine. We think the iPhone-maker’s products continue to fly off the shelves, and this holiday season for Apple may be the best in its storied history. But sometimes the market is just not fair…and for a company trading at less than 10 times forward earnings, excluding net cash, is borderline an injustice.
Still, we plan to take some more profits on the company in the newsletter portfolios if we catch a strong updraft in the markets. We continue to value shares north of $140 each, and as the old saying goes, “nobody ever got hurt taking profits.” Risk-seeking investors with a strong stomach to handle broader market weakness and a “long-enough” horizon may be able to ignore our newsletter portfolio fine-tuning. Of note, the decision has nothing to do with the ‘60 Minutes’ Charlie rose interview regarding Apple’s tax practices.
With that out of the way, let’s talk Star Wars. I have to admit that I’m no Star Wars expert, but the social media pathways are abuzz with people of all ages talking about the new film: Star Wars: The Force Awakens. There were grown men attending the firm in Chewbacca costumes, little kids bringing lightsabers, and mothers happily escorting families to and from the movies. Variety, as reported by Seeking Alpha, noted the latest installment of the Star Wars saga racked up “a monumental $238 million opening…justifying the Walt Disney (DIS) Company’s $4 billion purchase of Lucasfilm.” We think the road will be a long and profitable one for Disney and Star Wars.
Variety noted that “3D showings accounted for 47% of ticket sales, IMAX Corp (IMAX) made up 12% and premium large formats were responsible for 7%.” Seeking Alpha reported that in North America, the film brought in over $57,568 per theater, the “biggest ever for a wide release.” Theater operators Carmike (CKEC), Cinemark (CNK) and Regal (RGC) could experience a nice bump in holiday performance, though now expectations might be set insurmountably high for the next two installments, the eighth and ninth episodes of the Star Wars nine-part movie franchise.
Don’t hold us to it, but we think Disney might go the way of Time Warner’s (TWX) Harry Potter and Lions Gate’s (LGF) Hunger Games and Twilight franchises, and break the last episode into two blockbuster occasions. Could it do it with the eighth one, too? Or will we see ten episodes of Star Wars? Disney has a lot to think about, given the success of The Force Awakens. We’re excited for fans.
Movie Production: CKEC, CNK, DWA, LGF, RLD, RGC
Related tickers: HAS