As home theaters and streaming options become more adopted I, regrettably, foresee an ugly future for the theater industry. That said, the entertainment technology company IMAX has recently been posting higher earnings while diligently expanding to overseas markets. Is this stock worthy of an investment or is your money better spent at the concessions counter? Let’s examine their most recent globalization contracts for more information.
Rick Aristotle Munarriz from the fool.com writes that “IMAX now has contracts in place to have 45 theaters screening its super-sized format open in Russia by 2014. Russia has become IMAX’s third-largest market outside of the United States and China.” Also, in respects to China, it remains to be seen if people are willing to adopt streaming content as readily as those in the United States.
That said, I’m still concerned about the future success of 3D cinema. As you can tell from the below chart fewer and fewer people are choosing to see movies in 3D. And with 3D being a major selling point for the IMAX “experience” one could wonder how much a continued decreased audience interest would hurt IMAX sales.
Finally, let’s examine the SwamiChart for more information. What I love about this chart is that you’re warned of a possible peak in prices around June 8th thanks to the Swami SwingWave indicator. Remember that orange represents a “peaking” signal where as blue indicates a possible “valley”. Also, you were warned of another possible dip a couple of bars before today’s massive retracement.
In sum, I wouldn’t recommend investing in IMAX for the previously described fundamental reasoning. It’s great that the company is expanding to Russia but I’ll need to see proven success (as is the case with China) before raising any valuation.