Is Marvel getting away?


Ah, an upgrade of an old favorite of mine. Marvel Entertainment (NYSE: MVL). I've owned this one in the past. Never lost money on it. I'd like to be back in Marvel. Only one problem.

Yesterday, Marvel, a company whose comic library competes with Time Warner (NYSE: TWX) and its own stable of superheroes, received an upgrade from JPMorgan. It now is in the Overweight camp. Before, it was merely Neutral. As you might expect, the stock reacted. There was no way the market was going to ignore this because, really, Marvel is one of those stocks that does show a lot of promise considering that the sequel to Iron Man is due out next summer. Shares closed over 5% higher on Wednesday in reaction to the headline. The professional traders must loved the action.

But, is now the right time for individual investors to buy? I can't stand buying immediately after an upgrade. For one thing, there's oftentimes the risk of a pullback occurring after the upgrade excitement has run its course. For another thing, in the specific case of Marvel, it's a mighty long time until the second Iron Man hits theaters. Buying now could conceivably be a little early.

Then again, it might not be so bad to be early. And we're certainly closer to the new Iron Man now than we were when I wrote about a previous Marvel upgrade. Interestingly enough, at that time, I was worried about overall market sentiment in addition to being early. That issue rears its bearish head once again: I don't know about you, but I'm still nervous about an overall market correction after the rally we've witnessed.

I admit: I'm worried about Marvel getting away from me. I want to be on board before Robert Downey Jr. gets into that suit of iron again. I won't buy this week, though, no matter what. Marvel's trading volume yesterday wasn't as high as I would have expected it to be given the upgrade. Of course, let's remember that this is a holiday week. Hopefully the shares will be whacked in the next month on some bit of nonsense news in the markets, and an opportunity will present itself.

Disclosure: I don't own any company mentioned; positions can change without notice.

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Last updated: February 10, 2012: 07:06 AM

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