DreamWorks Animation Drops After Earnings: Buying Opportunity?

The AP also mentions two other disappointing subjects. Both a virtual world tied to the Kung Fu Panda franchise and a musical venture featuring Shrek failed to generate value. These missteps necessitated write-downs.

Perhaps the most significant news from the quarterly event is the idea that the company may alter its business model in terms of planned quantity of output. Previously, it was CEO Jeffrey Katzenberg's intent to release five movies every two years, with one year seeing three projects taken to market while the other year would contain only two films. I liked the concept, but I guess the realities of delivering extraordinary animated experiences at the cinema is tougher than the team expected. Or maybe execs didn't try hard enough to make the scheme work out? Who knows.

Looking at the stock, I'd say that those who have been interested in buying DreamWorks Animation may want to seriously evaluate this dip. Please note, this is a risky play. Buying now might mean buying too early. But I find it noteworthy that the shares have so far resisted dipping below their 52-week low, and have in fact stayed above the $27 level while I was writing this article. Don't take that observation as a guarantee of technical success, however; perform your own due diligence.

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