Looks like we have a tiger by the tail. Marvel Entertainment (MVL, $33.32, up $2.22) is is up 7% after reporting better-than-expected earnings before the bell. The company reported a profit of $45 million, or $0.57 a share, which was slightly below last year’s 1Q results of $45 million, or $0.58 a share. However, revenue jumped 75% to $197 million from $113 million while Wall Street had expected earnings of $0.36 a share, and $136 million.
Marvel continues to bank on its name as its blockbuster films and licensing fees continue to grow. Move over Spiderman, Incredible Hulk and Iron Man. There is a new sheriff in town and his name is Wolverine. The new flick did nearly $90 million in domestic sales and $160 million in worldwide box office sales. Wow!
Needless to say, the June call options we are holding, zoomed today:
Marvel Entertainment (MVL, $33.32, up $2.22)
June 30 calls (MVLFF, $4.20, up $1.55)
Entry Price: $1.05 (4/23/09)
Exit Price: $2.10
We sold half at $2.35 and all we have to do with this one is play the fade. You could set stops at $3.90-$4.00 to close the other half. I’d love to see Marvel get to $35 before fading but we can’t look a gift horse in the mouth without feeling greedy.