RealD Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of 3-D movie technologist RealD (NYS: RLD) climbed 10% today after its quarterly results easily topped analyst estimates.

So what: RealD shares have been crushed over the past year on worries about the 3-D movie market, but a strong third quarter -- EPS of $0.05 versus Wall Street's expectations of a $0.06 loss -- suggests that those fears are a tad overblown. Management also did a good job managing operating expenses, giving Mr. Market plenty of reason to be upbeat.

Now what: With 3-D versions of films like Star Wars Episode 1, Titanic, and Men in Black III coming up, the short-term momentum should continue. "Looking forward, we are excited about the promising slate of 3-D films in our fiscal 2013 that begins on March 24, 2012, as well as continued expansion within international markets," CEO Michael Lewis said. However, when you couple RealD's less-than-stellar fundamentals with the 3-D fad risk that still remains, the stock continues to be a questionable long-term opportunity.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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