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Dreamworks: Another Google?

"The bears have been growling at DreamWorks Animation (DWA NYSE) since its IPO on October 28. But we've heard this song and dance before. Long before Google (GOOG NASDAQ) took its first official step on Wall Street in August, the financial media was ripping into the Internet search engine on a regular basis. Even after the stock made a stellar debut, the bashing continued among the gurus. Meanwhile, the press hasn't exactly been tripping over itself to back DreamWorks, which went through the usual channels to release its IPO (unlike GOOG and its Dutch auction). In fact, an article in a daily newspaper following DWA's release was quick to point out the risks surrounding the stock despite its stellar launch.


"While skepticism isn't as rampant toward DWA as it was toward Wall Street outcast GOOG, brokerage firms and investors have yet to welcome the animation company with open arms. Both Zacks and Yahoo! Finance have yet to pick up any brokerage firm ratings for Dream Works. Like our forecast with Google, this is something to keep a close eye on. A little more than a month after GOOG's IPO, at least five brokerage firms initiated coverage of the stock. Continued fundamental and technical strength in DreamWorks could definitely draw the attention of Wall Street, bringing in a potential deluge of analyst rankings. Like GOOG, DreamWorks could become a stock that fund managers cannot afford not to own, and sentiment that moves from pessimism to acceptance could drive DWA to 'dreamy' levels similar to what we had previously seen with Google."
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