Marvel (NYSE: MVL) is a great company. It's got a lot of cool characters in its vast comic book portfolio. Spider-Man, Hulk, X-Men, you know them all. And it's a fun stock to both invest in and trade. It's a more direct play on movies than a Disney (NYSE: DIS) or a Time Warner (NYSE: TWX) is. I've made money on Marvel in the past. I don't currently own it, so I was pretty interested when I heard that Wedbush Morgan issued an upgrade this week.
Wedbush Morgan basically said that the market is undervaluing Marvel's potential. It sees a price target of $31. I myself think Marvel will break $30 yet again, but the problem I have is with sentiment. Exactly how will the market react to Marvel's shares this year?
There really isn't much going on in terms of catalysts. News Corp. (NYSE: NWS) will be releasing X-Men Origins: Wolverine this May. It'll be a hit, but it won't impact Marvel's coffers in as significant a fashion as something like Iron Man did. That's because Marvel took on more of the risk by financing that project by itself. The Wolverine feature is a licensing deal. Not as much kick to that. Aside from that movie, there aren't any more major releases set to hit in 2009.
I'm going to keep a close watch on Marvel's stock. I would love to get this below $20 per share. The 52-week low is $23.28, and the stock closed on Tuesday at $25.10. Seeing Marvel below $20 isn't out of the realm of possibility.
While I agree with Wedbush Morgan that the shares should be higher, I just don't feel comfortable buying just yet, especially considering that the big action is due to commence in 2010. We get both the Iron Man sequel and a film based on Thor in that year. Both of those projects are from the self-financed portfolio, not the licensed assets.
It could be a bit early to own Marvel, and without any good catalysts around, I could see the stock easily trending lower before it trends higher given the bad economic state of the world.
Disclosure: I own Disney; positions can change without notice.
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