DreamWorks Animation: Dip an Opportunity?

Here's the problem. If you compare how Dragon did to last year's Monsters vs. Aliens, which was released around the same time, you'll start to feel a sense of disappointment. That film made $59 million during its debut in the marketplace. Both Dragon and Monsters have similar budgets: the latter cost a reported $175 million to produce, and the former may have come in for about $165 million. At a cost of $165 million, one would have hoped for something north of $50 million at the very least. And I think management had high expectations for its latest effort, judging by its deal with Wal-Mart Stores, Inc. (WMT).

Here's the thing about today's price action: if you were thinking about getting in on DreamWorks Animation before the next Shrek sequel comes out in May, now may be the time to do some quick due diligence on the idea. This is a risky trade, certainly, but DreamWorks Animation down over $3 per share ahead of what should be a blockbuster is a compelling notion, maybe even a gift to market players. Nothing is guaranteed, though, so if you do buy the stock, make sure you wouldn't mind becoming a long-term investor if need be.

Disclosure: I own Disney; positions can change without notice.