Independent Exhibitors Film Bulletin (1963)

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FINANCIAL REPORT Quality of Product Is Key To Trading in Film Shares— Bache On what basis shall investors appraise the stocks of motion picture companies? On their substantial West Coast land holdings? Their fast-depleting libraries of old films? On their diversifications into electronics, records, TV production? The view of this department has long been that these are all minor factors, that film companies rise or fall on one major element — the quality and boxofhce performance of their feature film output. The research department of the prominent brokerage firm, Bache & Co., takes the same view in its current "Selected List" pamphlet for 1963. "Earnings of film companies", states Bache, "will continue to vary widely, reflecting the unpredictable audience response to individually very costly motion pictures. Although many of these companies have large film libraries and land holdings, which would tend to add stability, market prices are primarily determined by expected nearer term earnings." The firm declares its intention to limit purchases only to those movie companies it believes "will generate earnings over the intermediate term from a successful line-up of films." The report singles out Walt Disney as the industry's "best value" on the basis of "a steady record of growth because of the timeless nature of their films." In its quality rating of individual companies, Bache lists only Disney and United Artists as being above the speculative category. MCA, Disney, 20th Show Sharp Rises Although substantial gains were registered by several of the film companies in the two week period (to Jan. 17) covered by the Film BULLETIN chart, the overall summary shows prices of industry shares mixed. President Kennedy's request for a tax cut in his State of the Union Message apparently had relatively little effect on film and theatre stocks, for the advances were attributable to elements within the individual companies, rather than to any outside factor. MCA, Disney and 20th Century-Fox were strongly on the upside. The first-named outfit picked up 5 points, continuing steadily to regain the ground it lost during the complications that arose during its merger with Decca-Universal. Disney rose 3% largely on the basis of its report of a net of $5,263,491 ($3.14 per share), after taxes, for the fiscal year ended last Sept. 29. 2()th-Fox advanced $3 per share, sparked by the announcement of heavy bidding by theatres for "Cleopatra" and the prospect that the company will take in a huge sum in cash guarantees even before the costly film is released in June. The largest decline, 2%, was in M-G-M. Earnings have been down and a new president was named. In the theatre devision, AB-PT and National General showed good plus moves on their improving earnings status. NG hit a new two-year high of 10%. Wometco Steps Up Dividends Wometco Enterprises Inc. (over-the-counter), Miami-based theatre, TV, vending and bottling concern, announced an increase of approximately 11% in dividend payments. A regular quarterly dividend of 15c per share on class "A" common stock and 5l/2c on class "B" will be paid March 15. This follows the 30% stock dividend paid last December, and is in line with Wometco's announced intention to pay quarterly cash dividends at the annual rate of 60c and 22c per share on class "A" and class "B" stocks respectively. 'Profit Squeeze' Hits Loew's That increasingly familiar phrase, "squeezed profit margins", appears to have played a role in the Loew's Theatres Inc. report for the quarter ended November 30, 1962. Board chairman Laurence A. Tisch revealed that gross revenues were up 4 million dollars to $14,371,000 over $10,350,000 for the same period in the previous year, while net income dropped to $399,900 from $561,000 expenses obviously cut into the additional gross revenue to send per-share earnings down from 20c to 15c in the 1961 quarter. FILM & THEATRE STOCKS Close Close Film Companies 1/3/63 1/17/63 Change ALLIED ARTISTS . . 31/4 3% ALLIED ARTISTS (Pfd.) CINERAMA '.14% 15 + % COLUMBIA ..233/4 231/2 " % COLUMBIA (Pfd.) 771/4 DECCA 45i/2 451/4 % DISNEY 301/4 333/8 + 33/8 FILMWAYS 5 6% + 1% MCA 49 54 + 5 MCA (Pfd.) 34i/2 351/g + % M-G-M ■ 323/8 293/4 -2% PARAMOUNT 36% 35% " 3/4 SCREEN GEMS 18 17% 3/8 20TH-FOX ..21% 24i/8 + 3 UNITED ARTISTS .273/4 29 +iy4 WARNER BROS ..14% 14 % Theatre Companies * * * 36V2 +3% AB-PT .333/g LOEW'S ..23% 21 -2% NATIONAL GENERAL . ■ 81/4 103/8 +21/8 STANLEY WARNER .223/4 22 3/4 TRANS-LUX 13 123/4 % (Allied Artists, Cinerama, Screen Gems, Trans-Lux, American Exchange; all others on New York Stock Exchange.) j. j. * 1/3/63 1/17/63 Over-the-counter Bid Asked Bid Asked GENERAL DRIVE IN .... 1% 8I/2 10 11 MAGNA PICTURES .... II/4 l5/8 1% l3/4 MEDALLION PICTURES . . . . 41/4 5 4% 5% SEVEN ARTS 8 8% 81/4 9% UA THEATRES . . . . 51/4 6 5% 6% UNIVERSAL 57 60% 571/2 61% WALTER READE-STERLING ... 1% 23/8 1% 23/8 WOMETCO 19 20% 191/2 2iy4 ( Quotations courtesy National Assn. Securities Dealers, Inc.) Page 4 Film BULLETIN January 21, 1943