Intelligent Investor

Village Roadshow

By · 14 Jan 2013
By ·
14 Jan 2013 · 2 min read
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Recommendation

Village Roadshow Limited - VRL
Buy
below 3.80
Hold
up to 5.50
Sell
above 5.50
Buy Hold Sell Meter
HOLD at $4.27
Current price
$3.00 at 16:35 (31 December 2020)

Price at review
$4.27 at (14 January 2013)

Max Portfolio Weighting
3%

Business Risk
Medium

Share Price Risk
Medium-Low
All Prices are in AUD ($)

It’s been a hot summer, and many Australians have been seeking respite in cinemas and water parks. Indeed, according to a recent International Box Office Essentials report, cinema ticket sales have jumped 21% year-on-year between December 25 and January 7, in part due to the weather, and thanks to the release of popular new films such as The Hobbit. This bodes well for Wet N’ Wild, Movie World and Event Cinemas owner Village Roadshow.

Elsewhere Village-owned Village Roadshow Entertainment Group released its new film Gangster Squad, which generated around $27m of global ticket sales on its opening weekend, placing it third behind Zero Dark Thirty and A Haunted House. Still, one week of sales is too short a time to judge whether it’ll be a winner and, having seen it at the weekend, I can testify that although it's an OK film, it doesn't look like blockbuster material – which seems to fit with the mixed reviews it has received so far. The upcoming release of Baz Luhrmann's remake of The Great Gatsby appears more promising.

Village’s share price has risen 12% since our recent upgrade in Village Roadshow: a profitable ride? from 6 Dec 12 (Long Term Buy – $3.80), breaching our relevant price trigger, so for now we’re downgrading a notch to HOLD.

IMPORTANT: Intelligent Investor is published by InvestSMART Financial Services Pty Limited AFSL 226435 (Licensee). Information is general financial product advice. You should consider your own personal objectives, financial situation and needs before making any investment decision and review the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the responsible entity of various managed investment schemes and is a related party of the Licensee. The RE may own, buy or sell the shares suggested in this article simultaneous with, or following the release of this article. Any such transaction could affect the price of the share. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.
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