DreamWorks Animation (DWA)


Once in a while I see a stock that begs to be bought. One of those was Dreamworks Animation (DWA). I was reading the business page of my local newspaper and they were going on and on about what a disappointment the stock was since it had failed to hit estimated earnings. This was a year after the IPO, and the stock was trading for about half of the IPO value, at $23. On the basis of 'sheer cussedness' (or if everybody is talking it down, it might be undervalued), I gave it a hard look. Compared to Pixar (DWA's main competitor), the fundamentals looked very good, and they seemed to have popular (even 'blockbuster') films. I bought 100 shares on 7/13/05 at $23.22, and we'll see how it pans out in time.

Based on an analyst's call that set the target price at $28, I put a 'sell' order in for $27.75 in 3Q06. Today (11/01/06) they opened strong on good earnings and my trade executed at $28.50, closing my position. Nice to have one in the 'win' column.



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