Yesterday Carmike Cinemas Inc. Class A shares saw heavy trading due to positive comments by Dean Witter Reynolds Inc. analyst Alan Gould.
Gould predicted to the brokerage sales force that the schedule of new movie releases such as “Bram Stoker’s Dracula” and “Home Alone 2” should positively affect the company’s fourth quarter.
Columbia Pictures’ “Dracula” racked up $ 30.5 million in box office receipts when it opened this past weekend, a number much higher than expected.
Gould noted that the downside risk in the stock–which has remained flat for months–is $ 10.50 and that he has a target stock price of $ 16 by January and a 12-month target of $ 18.
Carmike Cinemas chief financial officer John Barwick noted that last weekend was a particularly good one for the company, with same-screen receipts up about 73% compared with the same weekend last year.
Gould also told the sales force of a rumor that the company might be buying about 60 new screens for 5 to 51/2 times cash flow, which he considers a “cheap price.”
Barwick declined to comment on the rumor but says the company is always looking for new market opportunities.
Carmike owns and operates about 1,500 movie theaters, based mainly in smaller cities in the southern U.S.
Carmike shares closed up 75 cents yesterday at $ 12.50.