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Non-Tech : IMAX 3D-the wave of the future -- Ignore unavailable to you. Want to Upgrade?

To: JAMES BORECKI who wrote (43)	3/11/1998 5:35:00 PM
From: Neil Kalton	Read Replies (1) \| Respond to of 170

James, I don't even pretend to be able to predict short term stock movements, etc. My best guesses as to why this one is stuck in the $26-28 range is that this is near the 52 week high and some investors probably have sell orders in the lower $28's providing some resistance. Also at current valuations this stock is by no means a value play. It has a current PE of 40 and a predicted EPS growth rate for the next year of 40%. The high valuations, IMO, can be viewed both positively and negatively. On the positive side - the Street has afforded IMAXF a relatively high PE because it views the company in a favorable light. The company has provided analysts with good guidance and the company has also hit estimates for every quarter going back a couple of years. The Street likes predictability and consistency. On the negative side, the lofty valuations deters value investors. I know when I buy stocks I like to think I'm getting a bargain. At $28 IMAXF could drop 20-30% and still trade at PE valuations higher than the S&P (I think this is correct, I didn't actually check the #'s). At these valuations IMAXF has little room for error, any signs of slowing growth could send the stock down rapidly. Overall, IMO, anybody buying at $28 is looking at a double in 2 years. This is based on on IMAXF making their numbers (which they have consistently done) and the growth rate remaining in the 25-35% range over the next five years. The analysts certainly think this is possible and after seeing an IMAX movie I also believe that the large screen format is a potentially lucrative emerging market. BTW, I've really got to buy this stock sooner or later! -nk