Friday, June 4, 2010

6/4/10 Picks

Guillermo Del Toro - GDELT

Due to his recent announcement that he will no longer be directing The Hobbit, it seems a strange time to recommend buying GDELT. However, the stock has not suffered much as a result of the announcement (it is currently trading at $34.42, down from a year high of $37.42. GDELT at either price is undervalued. GDELT's TAG is $50,962,564, and the next film to be pushed out of TAG range is The Devil's Backbone, which grossed only $754,749. This means that even if GDELT's next film does not make a dime, his adjusted price would be $50.81, a $16.39 per share gain (47.6%). While directing The Hobbit would likely have more than doubled his price, GDELT is still a good buy. GDELT tends to make a movie every year or two, so although his price likely won't jump as high as it would have for The Hobbit, you can expect a quicker return on your investment than you would have if he continued to stay involved in the development hell of The Hobbit.

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