IMAX stock expected to grow over next 5 years

August 31, 2010 – 3:25 pm

The Motley Fool think IMAX stock rocks:

Cheap stocks are great, but sometimes you get what you pay for. What’s the use of a bargain-basement P/E ratio if the company can’t grow? I have a long investment horizon and a high tolerance for risk, so I’m more interested in promising growth stocks than stodgy dividend machines.

To find stocks that satisfy my need for speed, while also going on sale at a great price, I like to look at the PEG ratio. It’s such a Foolishly useful metric that we’ve been known to call it the Fool Ratio. Divide the trailing P/E ratio of a stock by the estimated five-year earnings growth, and you have a neat little package representing the growth-adjusted value of the company. A fairly valued stock should land near the 1.0 mark. Higher numbers might indicate an overvalued security. A strong business with a low PEG ratio rocks!

IMAX (Nasdaq: IMAX) is sporting a way-low PEG ratio of 0.8 today. The bottom line is expected to grow by about 23% a year over the next five years, and the stock is trading at a very reasonable 19 times trailing earnings.

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UPDATE: More news on IMAX stock:

Comtex SmarTrend: SmarTrend’s Candlestick Scanner Detects Possible Bullish Engulfing Pattern for Imax (IMAX) | Top 5 Companies in the Movies & Entertainment Industry With the Best Relative Performance (LGF, IMAX, NWSA, TWX, LCAPA) | Shares of Live Nation Rank the Highest in terms of Relative Performance in the Movies & Entertainment Industry (LYV, IMAX, CNK, TWX, DWA) | Shares of Liberty Media Rank the Highest in terms of Relative Performance in the Movies & Entertainment Industry (LCAPA, VIA.B, DIS, NWS, IMAX)

The Motley Fool: Will IMAX Shorts Get Burned in 3-D? | Dream Stocks for Contrarian Investors

LearningMarkets: Looking Back at Recent Earnings from IMAX; IMAX, CAJ, EK, XRIT

Proactive Investors: Dow, Nasdaq And S&P Rally After Pending Home Sales Index Unexpectedly Rises In July

Forbes: Six Autumn Outliers