Investing in Marvel's Future.

[Advanced Dark]

I have quite a few shares of Marvel and I'm actually up a huge % from where I bought most of my shares but the shares are well off their highs from what has been a relatively "event free" 2005 & 2006 so far. Sure X3 is coming up but the stock has sagged recently but everything is unfolding for a killer 2007. If your'e even thinking about investing in this company these are great levels to get in at now.
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http://money.cnn.com/2006/02/22/commentary/mediabiz/index.htm?source=yahoo_quote

Simply Marvel-ous
This year should be a lousy one for Marvel Entertainment but watch out in 2007: here comes Spider-Man 3!
By Paul R. La Monica, CNNMoney senior writer
February 22, 2006: 12:30 PM EST


NEW YORK (CNNMoney.com) – Comic book fans know that the hero doesn't always save the day. Sometimes, the evil villain wins.
And for shareholders of comic book publisher Marvel Entertainment, these past few months have been like those dark times when their favorite character temporary loses his or her superpowers.

The first two Spider-Man movies have helped lift sales and profits for Marvel and Wall Street is hoping for more of the same when "Spider-

Man 3" comes out in 2007.Marvel is taking a big risk by prodcuing its own movies in-house. But the move may lead to more predictable

earnings and revenue for the company.Comic book carnage: Shares of Marvel Entertainment nosedived after an earnings warning in November.•••••••••
In November, Marvel shocked Wall Street with sales and earnings guidance for 2006 that was substantially below consensus estimates.
Shares of Marvel (Research) plunged 22 percent on the news. If Comic Book Guy from "The Simpsons" were a shareholder of the company, he would undoubtedly declare that it was the Worst...Earnings Announcement...Ever.
Not a heroic 2006...
So with the company set to report its fourth-quarter results for 2005 on Thursday, should investors turn the page on Marvel or is the company set to do its best Jean Grey imitation? (For those of you not in the know, she's the character from Marvel's X-Men series that dies and returns as the Phoenix.)
The fourth quarter numbers should actually be pretty healthy. Analysts are expecting sales to jump 12 percent and profits to surge 46 percent.
But nobody really cares about these results. Investors are worried about how lousy of a year 2006 is shaping up to be. Revenues are expected to drop 24 percent and earnings are expected to plunge 51 percent.
However, as the company continues to generate more and more of its revenue from lucrative licensing deals and less from its low margin publishing and toy businesses, the company seems primed to bounce back sharply in 2007.
Marvel has transformed itself during the past few years from a stodgy publisher of comic books into a legitimate entertainment company that has realized the value of its vast library of popular characters, such as Spider-Man, Captain America and the X-Men.
During the first nine months of 2005, Marvel generated more than half of its sales and 70 percent of its operating profits from licensing.
The company has struck deals with movie studios, video game software firms and other consumer oriented companies to receive a cut of revenue and profits from the sale of products using Marvel characters. Movies in particular have been a big factor behind Marvel's growth as the company as shared in the box office success of hits like the first two Spider-Man films.
This year, however, Marvel has only one movie based on its characters due out in theaters, "X-Men: The Last Stand," the third movie in that series. Fox, the movie studio owned by News Corp. (Research), is making this movie and was the producer for the first two, which grossed more than $370 million in the U.S. according to movie tracking service Box Office Mojo.
...but Spidey saves the day
But next year should be a lot better for the company.
A movie based on the company's Ghost Rider character is due out in February 2007. "Spider-Man 3" is tentatively set to be released in May and "Fantastic Four 2" should hit theaters in July. Sony (Research) is producing the Ghost Rider and Spider-Man films while Fox is the studio behind the Fantastic Four sequel.
Analysts are currently predicting that Marvel will report revenue of $487.8 million in 2007, an increase of 67 percent from estimated 2006 sales and a 26 percent improvement over 2005's projected results.
Profits are expected to rebound by nearly 140 percent next year. What's more, consensus estimates of $1.21 a share are a 13 percent increase from expected earnings per share for 2005.
For this reason, Anthony Gikas, an analyst with Piper Jaffray, said that he expects Marvel's stock to rally later this year on anticipation of a strong 2007. What's more, beginning in 2007, a new five-year licensing deal with toy maker Hasbro (Research) will kick in. Marvel said it will receive a guaranteed $205 million in royalty and service fee payments over the life of the deal from Hasbro, which will produce action figures, games and puzzles based on Marvel characters, and that $70 million of this is payable upon release of "Spider-Man 3."
"I do think the stock will get a lift in the back half of this year," Gikas said. "The vast majority of bad news was in the stock and the worst is behind them."
But investors might also be worried by a big gamble that Marvel is going to take in the next few years.
Last September, the company announced that it had borrowed $525 million to finance the in-house production of up to 10 movies based on characters such as Captain America, Nick Fury and the Avengers. Paramount, a subsidiary of Viacom, will distribute the movies and the first movie is tentatively scheduled for 2008.
The upside is obvious. If these movies are hits, Marvel reaps almost of all the gains instead of having to negotiate for a cut from the larger movie studios. But if these movies flop, they will have a bigger impact on Marvel's revenue and earnings than a failure of a film that Marvel is merely partnering with a studio on.
This risk might already be priced in the stock though. Shares trade at about 13 times 2007 earnings estimates.
And Gikas thinks that Marvel will benefit from making its own movies since it will make them less reliant on other Hollywood studios' schedules. He argues that Marvel may be in a better position to produce a film or two a year, which should lead to more predictable earnings and revenue streams.
"The issue is the sustainability of earnings," Gikas said. "What this does is give Marvel the flexibility to set their own schedule so they are not the mercy of the studios."
So yeah, Marvel's stock may be acting like mild-mannered Peter Parker right now. But there's a good chance that before long, shares will once again be scaling new heights just like Spidey.
For more about Marvel's heroic turanround, click here.
For a look at the profitable world of anime, click here.
Gikas does not own shares of Marvel and his firm has no investment banking relationship with the company.

 

[co2]

thanks. I was going to look into this.

 

[Advanced Dark]

^ It's one of the best "long term" plays out there. If you have the funds buy it and forget about selling it for years. The foundation is just being built for this company now. After 2008 they start making their own films on top of all the yearly revenue from the old licenses, plus MSFT has the big MMORPG coming out based on Marvel characters.

2007 is gonna be huge though.

 

[Erundur]

I invested in Marvel's company 4 years back, that invest is paying my way through college

we'll my undergraduate degree anyway.

 

[ShadowBoxing]

I've lost money with them....bad investment property for long term. I expect it to go down in the next few years

 

[YJ1]

I invested in Marvel's company 4 years back, that invest is paying my way through college

we'll my undergraduate degree anyway.

I bought shares back in 2001 and have been grinning ever since. I made my profit and I'm still holding a majority of those initial purchases. Advanced Dark is absolutely right. Just ride out this current lull and/or buy more now. MVL will start to gain notice later this year and surge accordingly. I really like most of MVL's licensing and entertainment business moves. (The new Hasbro toy deal, the Paramount movie distribution deal, etc.)

 

[Advanced Dark]

And MSFT's MMORPG which is gonna be a big deal. Marvel got to where it is now making a minimal share from movie revenue. This Paramount deal and getting Iron Man and maybe Hulk rights back is just HUGE>

 

[Advanced Dark]

I've lost money with them....bad investment property for long term. I expect it to go down in the next few years

You're completely uninformed to use kind words. It might not great for the next few months (so you buy during the lull) but the next few years how could anyone in their right mind say it's a bad investment. Back up your words as to why? The stock has already priced in a horrible 2006 forecast. Next year is huge with Spiderman 3, Ghost Rider, and Fantastic Four. That's the first year with 3 tentpole pictures for Marvel...ever. 2007 is also the first year that Marvel starts the Paramount deal and starts producing it's own films. 2008 is when the MSFT MMORPG deal comes out and the ATVI games. Look at all the movies in development that will fill the pipeline up till as far as the eye can see. The Hasbro deal is also vital to their future which is a 5 year deal guarantee of 210 mill to Marvel. They're dominating the Publishing segment, and most of their video games are top sellers and the quality is getting only better. How can you say it's a bad investment long term? When did you lose money on them? You must have bought at one of the recent peaks because I got in at 6.08 with most of my shares before the stock split and bought more on the ride up. There is not a single financial analyst on the planet who thinks Marvel is a bad company long term or that 2007 won't be a much bigger year than ever.

Are you referring to MRV from years ago before Avi Arad? If that's the case you're talking about a totally different company. Otherwise there is not one possible scerio out there for saying MVL will go down from these levels in the next couple years except a doomsday scenerio of X3, Spiderman 3, FF2, Wolverine, and the rest of the films all crashing , and Marvels ownl slate failing. LOL

I'm rambling and ranting but the statement you made has nothing to back it up. I could sell my shares now and make an enormous profit however I bought Marvel not for what is going to happen this year or next but because of the significant long term growth potential. Marvel is still a little baby that used to rely on others to get their product out...not anymore. Again, short term we'll have up's and downs or stay flat till X3 comes out and 2007 approaches...then blast off.

 

[Advanced Dark]

I invested in Marvel's company 4 years back, that invest is paying my way through college

we'll my undergraduate degree anyway.

That's about when I bought and I have no plans on selling till I think Marvel has reached their fullest potential but I think Viacom will buy them out before then.

 

[zer00]

You're completely uninformed to use kind words. It might not great for the next few months (so you buy during the lull) but the next few years how could anyone in their right mind say it's a bad investment. Back up your words as to why? The stock has already priced in a horrible 2006 forecast. Next year is huge with Spiderman 3, Ghost Rider, and Fantastic Four. That's the first year with 3 tentpole pictures for Marvel...ever. 2007 is also the first year that Marvel starts the Paramount deal and starts producing it's own films. 2008 is when the MSFT MMORPG deal comes out and the ATVI games. Look at all the movies in development that will fill the pipeline up till as far as the eye can see. The Hasbro deal is also vital to their future which is a 5 year deal guarantee of 210 mill to Marvel. They're dominating the Publishing segment, and most of their video games are top sellers and the quality is getting only better. How can you say it's a bad investment long term? When did you lose money on them? You must have bought at one of the recent peaks because I got in at 6.08 with most of my shares before the stock split and bought more on the ride up. There is not a single financial analyst on the planet who thinks Marvel is a bad company long term or that 2007 won't be a much bigger year than ever.

Are you referring to MRV from years ago before Avi Arad? If that's the case you're talking about a totally different company. Otherwise there is not one possible scerio out there for saying MVL will go down from these levels in the next couple years except a doomsday scenerio of X3, Spiderman 3, FF2, Wolverine, and the rest of the films all crashing , and Marvels ownl slate failing. LOL

I'm rambling and ranting but the statement you made has nothing to back it up. I could sell my shares now and make an enormous profit however I bought Marvel not for what is going to happen this year or next but because of the significant long term growth potential. Marvel is still a little baby that used to rely on others to get their product out...not anymore. Again, short term we'll have up's and downs or stay flat till X3 comes out and 2007 approaches...then blast off.

Tool.

 

[YJ1]

That's about when I bought and I have no plans on selling till I think Marvel has reached their fullest potential but I think Viacom will buy them out before then.

The "secret" may be out judging by today's activity. Quarterly earnings report came out today and the stock price jumped. Someone liked something they saw. Great day for MVL long term investors. I agree and still think this stock will keep trending upward. I expect a few bumps in the road later this year but, long term, MVL is gold.

Advanced Dark, what do you think a buy out will mean in terms of the price of the stock and its ramifications to current stock holders?

 

[pickleweed]

2007 doesn't seem to be that big of an up for marvel. back in 2000 or whenever you initially bought the stock, marvel was in the slumps. spider man hadn't hit, x-men didn't either. now they're an inflated company riding a trend of superhero pop revival. ghost rider isn't really a draw (even with nick cage), fantastic four isn't a top draw either. spider man is marvels bread and butter, and 3 is where the train stops. most of the creative personnel are gone after this one, and furthermore, can the american attention span hold for a couple more flicks? now im not saying spidey will flop, but as in an investment it's not as strong a buy as it would be in 2000. iron man is another good property, but honestly how many more quality lisences does marvel have?

in a nutshell - the time to buy was 6 years ago. this puppy peaked.

 

[ShadowBoxing]

You're completely uninformed to use kind words. It might not great for the next few months (so you buy during the lull) but the next few years how could anyone in their right mind say it's a bad investment. Back up your words as to why? The stock has already priced in a horrible 2006 forecast. Next year is huge with Spiderman 3, Ghost Rider, and Fantastic Four. That's the first year with 3 tentpole pictures for Marvel...ever. 2007 is also the first year that Marvel starts the Paramount deal and starts producing it's own films. 2008 is when the MSFT MMORPG deal comes out and the ATVI games. Look at all the movies in development that will fill the pipeline up till as far as the eye can see. The Hasbro deal is also vital to their future which is a 5 year deal guarantee of 210 mill to Marvel. They're dominating the Publishing segment, and most of their video games are top sellers and the quality is getting only better. How can you say it's a bad investment long term? When did you lose money on them? You must have bought at one of the recent peaks because I got in at 6.08 with most of my shares before the stock split and bought more on the ride up. There is not a single financial analyst on the planet who thinks Marvel is a bad company long term or that 2007 won't be a much bigger year than ever.

Are you referring to MRV from years ago before Avi Arad? If that's the case you're talking about a totally different company. Otherwise there is not one possible scerio out there for saying MVL will go down from these levels in the next couple years except a doomsday scenerio of X3, Spiderman 3, FF2, Wolverine, and the rest of the films all crashing , and Marvels ownl slate failing. LOL

I'm rambling and ranting but the statement you made has nothing to back it up. I could sell my shares now and make an enormous profit however I bought Marvel not for what is going to happen this year or next but because of the significant long term growth potential. Marvel is still a little baby that used to rely on others to get their product out...not anymore. Again, short term we'll have up's and downs or stay flat till X3 comes out and 2007 approaches...then blast off.

They peaked. They made on or two movies...got investors ravenous...and now they're sick of them. Investors don't give a sh** about what movies you're making...you obviously no nothing about the stock market

 

[ShadowBoxing]

2007 doesn't seem to be that big of an up for marvel. back in 2000 or whenever you initially bought the stock, marvel was in the slumps. spider man hadn't hit, x-men didn't either. now they're an inflated company riding a trend of superhero pop revival. ghost rider isn't really a draw (even with nick cage), fantastic four isn't a top draw either. spider man is marvels bread and butter, and 3 is where the train stops. most of the creative personnel are gone after this one, and furthermore, can the american attention span hold for a couple more flicks? now im not saying spidey will flop, but as in an investment it's not as strong a buy as it would be in 2000. iron man is another good property, but honestly how many more quality lisences does marvel have?

in a nutshell - the time to buy was 6 years ago. this puppy peaked.

bingo...entertainment companies are not good long term investments because they are unreliable. They are at the whims of an uncontrollable public who is on one thing and then of to the next. If you were smart you'd never touch Marvel and focus on stable companies like Lowes, Home Depot, Steel and other manufactured goods. Those things never go "out of style". As I said "investors don't give a sh** about movies and toys". They only care about "the next big thing" and what is "always big". Short term investments are things like Marvel that experience big but fleeting moments of popularity. Long term investments would be something like steel companies. A product that is necessary and always needed (for the foreseeable future).

If you want to invest in Marvel 6 years ago was the time. If you like getting the quarterly reports invest 15 bucks....you'll still get em. I had 1000 dollars in their....now its down to the low 800s if that gives you any impression how great a long term investment it is. Invest in Marvel if you want to, don't go deluding yourself its some awesome stock though.

 

[jaydawg]

Seriously. I love Marvel, but anyone with half a brain wouldnt invest in them now. Just cause your a fan and put a bunch of money in it, dont get mad cause other people did the smart thing and pulled out. X3 isnt going bring in that much. You really think something like Blade on Spike TV is going to raise revenue? An R-Rated movie like Ghost Rider? Its hardly as sure fire as Spider-man 3. Thats when you want to invest, a couple of months before SM3 comes out and all that merchandise is being sold. Lets be honest here. Marvel is a bad investment.

 

[BIGGUN]

Marvel is a bad investment.

yup...gotta agree w/ this one. (GR will be PG13 though )
the time to get this stock was when it was 1st offered...i wouldnt invest much (or any) in it now. stick to oil/natural gas companies, health care, some tech, ect.
Marvel MIGHT be ok for short term trading...like hold it until a newly superhyped movie is about to be released and then sell it once it goes up a few bucks.

 

[ShadowBoxing]

yup...gotta agree w/ this one. (GR will be PG13 though )
the time to get this stock was when it was 1st offered...i wouldnt invest much (or any) in it now. stick to oil/natural gas companies, health care, some tech, ect.
Marvel MIGHT be ok for short term trading...like hold it until a newly superhyped movie is about to be released and then sell it once it goes up a few bucks.

exactamundo....face it X3 will probably tank...especially in the face of SR. SM3 looks like it might rock the box office. Ghost Rider will win over no one except die hard fans unless its nothing short of spectacular. Luke Cage, Shang Chi, Hulk, FF2, and X-spinoffs are not reliable money makers especially since two of those movies initial movies tanked hard. Captain America may bring back some stuff in 2009....but you better pray by then people aren't dog tired of Marvel movies

Actually for entertainment....you'd be better switching to DC (I'm being facicious....)

 

[jaydawg]

I highly doubt X3 will tank... but its not going to do that much for stocks. After two weeks, forget about it. But SM3... I really think with the black suit and Venom happening, its going to totally out do SM2.

 

[The Punisher]

I highly doubt X3 will tank... but its not going to do that much for stocks. After two weeks, forget about it. But SM3... I really think with the black suit and Venom happening, its going to totally out do SM2.

Yep, it's looking that way for sure.

 

[TheVileOne]

Ugh, I hope Viacom doesn't buy out Marvel.

I really think its bad enough that Time Warner owns DC comics.

 

[Advanced Dark]

^^^You and me both Vileone. After these Paramount (division of Viacom) films get rolling, Blade TV on Spike (division of Viacom), I wouldn't mind Viacom snatching them up in like 2012-2015 but now would suck as an investor and a fan. I like the way Marvel is setting it's future up now and don't want it f'd with by a company that just reorganized. However Viacom's earnings were bad thanks to Paramount's lousy slate in 2004/2005. Marvel will save it down the road and owning MVL would ensure more profit. I really hope it doesn't happen before 2012.

 

[zanos]

^ It's one of the best "long term" plays out there. If you have the funds buy it and forget about selling it for years. The foundation is just being built for this company now. After 2008 they start making their own films on top of all the yearly revenue from the old licenses, plus MSFT has the big MMORPG coming out based on Marvel characters.

2007 is gonna be huge though.

I don't know much about stocks but I don't see marvel as a huge long term investment especially at their current price. By the time they start making their own films most of them will have been made by other studios already. Big hitters like Spider-man and X-Men will have been long done. All they'll be left with is a few crappy second or third tier superheroes. Who's the say the public will even embrace the genre anymore. This isn't to say you won't make some money but at 17 dollars a share forget it.

 

[ShadowBoxing]

I highly doubt X3 will tank... but its not going to do that much for stocks. After two weeks, forget about it. But SM3... I really think with the black suit and Venom happening, its going to totally out do SM2.

tank was the wrong word...I meant it won't have any longevity at the box office. It will do "decently". Likely it won't outdo X2.

 

[Advanced Dark]

I don't know much about stocks but I don't see marvel as a huge long term investment especially at their current price. By the time they start making their own films most of them will have been made by other studios already. Big hitters like Spider-man and X-Men will have been long done. All they'll be left with is a few crappy second or third tier superheroes. Who's the say the public will even embrace the genre anymore. This isn't to say you won't make some money but at 17 dollars a share forget it.

You clearly have no idea what you're saying. Please tell me how MOST of the characters are at other studios. Other studios have very few characters:

Lionsgate: Punisher
New Regency: Daredevil/Elektra
Fox: X-Men & spin offs, Fantastic Four, Silver Surfer
Sony: Spiderman & Luke Cage
Paramount has Deathlok
New Line: Blade

The rest of the hundreds...no make that thousands of characters are at Marvel. You might think they're small unheard of characters but aren't ALL characters unknown before they're revealed to the world?

Of the above Marvel will very likely get Daredevil and Elektra back, and if Sony doesn't get moving you'll see Luke Cage back at Marvel too.

Marvel has tons of characters to make movies from that could surprise you like Blade. Then they have live TV. They just began expanding into the international market too. And to make a stupid statement like Spiderman and X-Men will be long gone is just laughable. Spiderman, X-Men, Batman, Superman and characters like that are around long past me or you will be around. To think thank X-Men 3 or Spiderman 3 is the last of the franchise is just plain ignorant. Marvel's rolling out their first films in 2008/2009 which is right around the bend. Now Spiderman is a SUPER franchise which might make the others look small...but they're not. Even Blade generated over a billion dollars as a franchise. Marvel also isn't only about movies. They have toys, video games, role playing games, clothing, merchandise, action figures, etc...There's not a single type of product that you can't find without a Marvel character on it. Lunch boxes, thermuses, beach blankets, frisbees, balls, bed sheets, jackets, shirts, sleepingbags, paper plates, napkings, video game hardware skins, cell phone screen savers, etc... They strike licensing deals every week on something or another and the contracts are very specific. If you dont' know alot about stocks then you clearly don't know anything about whether the current price is good or not. You have to think about where the company is now and what price it's at. Now look at what's in store for 2007 and beyond. 2007 is another studio year for MVL but it's a huge one with 3 major films. Between 2007 and 2008 the Marvel produced films come out which is where the real money is for them in the theatrical segment. Marvel made very little money directly from movies before. Most was from merchandise and toys. Do some research. I have 11,000 shares and could sell now and walk away with a huge profit but I bought Marvel for where it's going...not for where it is.

 

[adamcz]

Wow, interesting thread...

Investing in stocks is my hobby, and I spend a lot of time studying different methods, and reading books about the most succesful investors. I believe very strongly that you should never act on the advice of others when investing your money (unless that advice is to read a particular book, or consider a new method of valuating a business). You never know how much research that person has actually done, whether they have a bias, or whether they have the same investing goals you do.

In the interest of full disclosure, I have made what to me is a good amount of money from Marvel, and I continue to hold for the long term. I think it is still an attractive investment, but I really hope that nobody would consider putting their own money into it without doing some research of their own. There are countless companies out there, and you have to decide if this is the best one for your money.

I really have to laugh at the posters who think certain sectors are great or terrible though. There is no such thing as a can't-miss investment, and that is especially true when you say increadibly general things like "Invest in health care," or "invest in steel/natural gas."

What you should be saying, is "invest in a company whose future earnings will be greater than the rate of return you can get from other investments."