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The Week in Review/The Week Ahead: The Universal Fund [UNIVX], Episode 11

Posted by: UNIVX (a.k.a UNIVXFund) on Nov 29, 15:44

The fund was up 7.6% for the week with the major money-makers being moves on The Mummy reboot after some Universal news and the continued downward trajectory of By the Sea and a handful of overvalued limiteds like Suffragette, Legend, and The Danish Girl, as well as our short position on The Veil which is now listed on sites like Amazon and has to have a $0 cashout incoming.

Suffragette, By the Sea, and The Danish Girl all seem to have hit their low and now be undervalued, so we've reveresed position on all three.  For the time, with no new news items to invest in, I'm still holding onto The Mummy and Van Helsing to see if they get any more bumps in the early part of this week as some traders cash out their weekly plays.  But they'll likely be traded soon, particularly Van Helsing, which is somehow trading at less than it was before the news hit, as it suffered more of a reactionary backlash after the bump than the bump itself.

Krampus hits wide next weekend, and it's a big question mark for me at this point.  I don't think the film looks particuraly good from the trailers, but it's trading pretty low, and it's possible it may do well as a result of a) being Christmas themed, b) being anti-holiday themed, and c) being the only wide release next weekend apart from the religion-themed Mother Teresa picture The Letters.  I could see it capturing the zeitgeist and doing quite well, and I could equally see it suffering the same fate as the many bombs and underperformers that have plagued this fall season.  It's funny to look back at the Universal releases and realized the only solid wide release performer we've had is M. Night Shyamalan's The Visit.  Everything else has disappointed, and some, like Crimson Peak and Steve Jobs, I had thought would do quite well and be big money-earners for us this season.  But we've made our share of cash shorting everything as they've nosedived, including spectacular bombs like By the Sea and Jem and the Holograms.  So we head into December with Krampus and Sisters.  I'll be watching Sisters as closely as I'm watching Krampus, because while I expect that one to bomb, I feel like the holiday season bucks expectations more than the rest of the year.

Last installment I said I might slow down eventually on profiling the upcoming slate, but I'd forgotten that I do plan to include the many Universal films in development without a release date first.  There are a ton of them, and it'll be interesting to take a peek at them for the investor/trader not already aware of them.  And that brings us to the next three on our list.

Kevin Hart: What Now?

Personally, I'm not that into concert films in this day and age, particularly those theatrically released.  It's just too easy to watch them through the many streaming platforms or rental platforms.  But Kevin Hart is a box office monster, and I'm sure this will do well.  It's currently trading around $11, and his last one, Let Me Explain, cashed out at $31, so there's still plenty of upside.

A Meyers Christmas

This has been slowly increasing with many cast news items over the past several months, so it's already trading at $26.  Love the Coopers, another holiday-themed, semi-dysfunctional family comedy/drama which came out a couple of weeks back, looks like it's headed for a cashout around $23.  Diane Keaton had another similar film several years back, The Family Stone, and that one did $53.  Will Meyers be more Coopers or Stone?  Let's look at similar films featuring some of the actors in Meyers.  Danny Glover featured in Neil LaBute's redo of Death at a Funeral, which did $39.  MoNique had Welcome Home Roscoe Jenkins (though Martin Lawrence may throw that one off from being able to be counted as more of an ensemble pic), which did $39 as well.  Both Romany Malco and Gabrielle Union were in Think Like a Man and its sequel ($81 and $62, respectively), but those are more relationship ensembles versus family ensembles and I'm not sure if they'll translate as directly.  I'm going to put Meyers somewhere the low $40s, which means there's currently some upside to the stock, but if it keeps doing what it's been doing, its going to be a slow and steady climber over the next year, and the fund probably won't have the money to park in it for such a long period of time.  Likely by the time the film releases, expectations will already be or par with that $40 range, and it won't be much of a money-maker at that point, either.  Writer/director David E. Talbert's last theatrical project (he's done a lot of video/cable stuff) was Baggage Claim, with Paula Patton and Taye Diggs.  That film cashed out at $20 and didn't exactly set the box office on fire, which seems to confirm modest expectations and curb the possibility of some kind of larger, runaway hit.

The Great Wall

Zhang Yimou's latest.  I've been familiar with Yimou's films for 25 years now, and he's certainly a talented filmmaker, but his films are always limited releases.  Americans don't usually flock en masse to subtitled foreign movies, and Yimou's films typically do under $5.  In 2012, he had The Flowers of War with Christian Bale and that one still managed to only hit about $300,000, as did his film after that, Coming Home.  For some reason, perhaps because it's slated for wide release, or perhaps because it stars Matt Damon and Willem Defoe, The Great Wall is currently trading at $37.  I think the stock is significantly overvalued and the film will end up making $5-12 million as a high water mark; and it's still possible and probably even likely that it could end up pulling in less than $5.  If I had the money to park in the stock for a full year, I'd short it and let it sit and ride the stock down.  If the The Great Wall is anywhere close to where it currently sits when it releases, it should be a big moneymaker as a short.

And that wraps up another edition.  The fund's next release (and next wide release) is Krampus on December 4th.

Tag(s): UNIVX

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