Ekaterina Shovkova
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Ekaterina Shovkova in TRADEintime,

Does someone dream about shares of DreamWorks?

About company

DreamWorks II Holding Co. also known as DreamWorks SKG, DreamWorks Pictures, or simply DreamWorks, is an American film production company which produces and develops films, television programming, and video games. It was also a former film distributor for its own and third-party films.

Financial situation

DreamWorks, the studio behind 'Shrek', 'Kung Fu Panda' and 'How to Train Your Dragon,' revenues for the third quarter jumped from $180.9 million a year ago to $259.2 million (for more than 43.3 percent).

"DreamWorks Animation delivered solid third quarter results, highlighted by strong top-line growth and meaningful segment gross profit across all of our businesses.

According to DreamWorks II Holding Co

Valuation

According to DreamWorks II Holding Co

Source: made by TRADEintime (based on data from Morningstar) 

It is mentionable that P/B ratio is lower than an Industry Average that determines stocks undervaluation. Nevertheless, it could also mean that something is fundamentally wrong with the company. This ratio also gives some idea of whether you're paying too much for what would be left if the company went bankrupt immediately.

TRADEintime believes that the last one is more suitable explanation for the company’s financial situation.

P/S ratio is a little bit above the average, so it suggests overvaluation. 

According to Morningstar

A graph reveals the changes in initial $10,000 investment value over a period. The "growth of 10,000" chart is typically used to compare the returns from various investments, either with each other or with an underlying benchmark. The returns shown in such a chart include reinvestment of dividends and capital gains, but exclude fees and sales charges.

Here we see that DWA haven’t the same trend as Media-diversified industry and SP500 too. So it means that we can’t see the correlation between its peer group.

Also it is mentionable there is a lowering trend in reinvestment of dividends and capital gains from 2010.

Technical analysis

DreamWorks Animation SKG Inc. is up 18.22% in the last 3-month period. Year-to-Date the stock performance stands at 4.03%. The company shares have rallied 4.12% in the past 52 Weeks. On June 5, 2015 The shares registered one year top of $29.75 and one year lowest level was seen on September 24, 2015 at $17.02.

Source: made by TRADEintime (based on tradingview)

TRADEintime for the short-term investment decided to sell the shares as there is a collateral trend in the last 3 weeks. So we sell at price $24,70 and then close the deal at $24.20.

Also there were more facts for selling the Dreamworks shares:

1) P/B ratio is lower than an Industry Average that determines in our case that something is fundamentally wrong with the company.

2) P/S ratio is a little bit above the average, so it suggests overvaluation.

3) There is a collateral trend in the last 3 weeks.

4) There is a lowering trend in reinvestment of dividends and capital gains from 2010.