This stock should be trading around $20 in a year. The low P/E that has accompanied this stock was based on the fact that anticipated future earnings growth was flat. As the latest news indicated, however, earnings growth is now linked to the onslaught of DVD technology. LPAC is positioned to hang on the coattails of the DVD explosion.
DVD post-production needs will be enormous. If you have ever seen a DVD demonstration you will see that the movie is only half the story. Each DVD is more like a unique work of art, containing its own style of animated menus to access the special features that are also on the DVD. Special features commonly include: scenes from the cutting room floor, interviews with the stars/director, a "commentary track" where you can watch the movie and listen to the director's/actors take on the scenes, multi-format (HDTV, wide screen, normal) choices, multi-language subtitles. Every DVD seems to try to outdo the other. Thus, LPAC is going to have a ton of work in 1999. If there is a risk here it will be whether they can grow fast enough to accommodate the demand for their services.
BTW, I am also a DISK (Image Entertainment) stockholder. Their stock went from 5 to 12 in Dec-Jan based on DVD anticipation. They are only making about .07 per share per quarter. |
