Thursday, August 10, 2006

Notablecalls - Paperstand

The WSJ's "Heard on the Street" column discusses box-office mkt, saying that this year's 4% upswing at the domestic box office is more than just a welcome relief to beleaguered movie-theater chains. The theater industry's ups and downs in recent years have largely been outside the view of investors, as only two major players, Regal Entertainment (RGC) and Carmike Cinemas (CKEC), are publicly traded. But, a handful of co's are considering public debuts. For example, Madison Dearborn Capital Partners, which owns Cinemark, is considering taking the combined Cinemark-Century public. Probably the biggest potential initial public offering would be AMC Entertainment. 2.5 years after taking the co private, its owners, a consortium of private-equity firms are considering taking AMC public. The deal could be valued at $3-4bn. The fast-growing theater-advertising co, National CineMedia, is owned jointly by Regal, AMC, and Cinemark. Theater advertising grew almost 21% in '05 and with additions like original celebrity interviews and behind-the-scenes footage from current releases, National CineMedia's retooling of its preshow entertainment segment, seems to be going over well. As a result, some investors say they would look kindly on any National CineMedia offering, which according to analysts could be valued at $2bn or so. For now, investors in Regal, which owns 50% of the cinema-ad co, are getting half of CineMedia's rev, a fact that could help explain the recent performance of Regal's stock, which is up 5% since the spring. "Ppl are investing in Regal in part because they like the National CineMedia business," says Gordon Hodge, media analyst at Thomas Weisel.

Barron's Online highlights natural gas stocks, saying that with war on multiple fronts and terror threats to oil supplies looming globally, investing in the geopolitical safe haven of US-based natural gas exploration should have newfound appeal. Without rebels threatening supply or new govt restrictions on exploiting reserves, domestic gas producers could become acquisition tgts and should benefit if natural gas prices continue to recover from the multi-year low they hit in July. And there are several reasons they should: inclement weather, like the recent heat wave, can deplete supplies. In addition, N-American reserves are dwindling and expensive to extract, and natural gas prices have not kept pace with the rise in oil prices. Among the US explorers and producers focused on natural gas, co's with attractive valuations and operations include EOG Resources (EOG) and Newfield Exploration (NFX). "The [energy stocks] that have been overlooked are natural gas stocks," says Eric Bolling, an independent trader at the NYMEx. "

According to the Barron's Online, gambling icon Jack Binion has wasted no time in betting on Wynn Resorts (WYNN), putting down $30.2m for the casino operator's shares one month after he was appointed Chmn of subsidiary Wynn Intl. In 1994, Jack Binion established the privately held Horseshoe Gaming Holding, which he sold to Harrah's Entertainment for $1.45bn in '04. Ben Silverman, director of research at, points out that Binion's purchase of 438K shares at prices ranging from $68.32-69.14 each adds to the 1.06m shares Binion already held in the co before becoming Chmn of Wynn Intl. "[Binion] is a guy who knows the industry as well as anybody," Silverman says, "He's hitching his horse to [Wynn Resorts] both in terms of what he's doing with his time and energy as a individual, and what he's doing with some of his money."

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