Everyone's talking about Marvel Entertainment Inc. (NYSE: MVL ) these days. The films are big buzz generators, and Marvel has been expanding its digital empire. They've got 5,000 high-profile characters that have defended the planet for more than sixty years, but the real question is whether Marvel's stock is a friend or foe.

1. In 2004, Marvel authorized $1 billion for stock repurchases, and had only $128 million remaining as of March 31, 2008. This suggests that they have long-term faith in the company.
2. It's looking good for Marvel in the short term as theater, toy, and eventually DVD sales from Iron Man and The Incredible Hulk contribute to the bottom line.
3. Marvel just created and filled a digital media executive position. It's a sign that Marvel is being proactive about digital media.
4. Recent licensing deals promise a steady income and the continued utilization of their biggest asset: the characters.
5. What does the list of future self-produced Marvel films look like? Right after The Incredible Hulk comes the already highly anticipated Iron Man 2.

1. Marvel stock was recently downgraded. As one analyst explained, there's nothing in the works that will increase share price next year.
2. Some may argue, but many would say the last few years of superhero movies are a fad. Marvel has to hope this fad doesn't fade before the rest of its eight movies are released.
3. Quarterly revenue growth is in the tank – a negative 25.7 percent compared to the same quarter last year. This doesn't include revenue from Iron Man or The Incredible Hulk, but following these two films, Marvel has a year and a half before another big movie comes out.
4. Roughly 24 percent of the float was shorted as of June 10, 2008. That's a lot of money betting against Marvel.
5. According to MSN Money, Marvel's P/E ratio of 18.6 is well above the industry average of 11.9, which makes Marvel fairly expensive considering its volatility.

Marvel is one of the great companies of the last century. As cinematic visual effects have improved, their comic characters have come to life. The company has a successful past in entertainment, but will they have a strong financial future?

1. Marvel just announced a brand new $100 million buyback of stock. They are using cash to buy their own stock in the open market, possibly because they believe it is undervalued.
2. This company is extremely profitable. They made $140 million in net income and $1.70 per share in 2007.
3. Marvel's first two self-produced feature films, Iron Man and The Incredible Hulk, made more than $157 million combined in their opening weekends. These numbers should increase sales and profits.
4. Global demand is huge and Chairman Morton Handel predicts that the upcoming films will provide even more international exposure.
5. Institutions, rather than individual investors, own 67 percent of Marvel. These institutions have millions of dollars at their disposal and they're choosing to invest in Marvel.

1. The company will not release a single self-produced film in 2009 as a result of the writers' strike.
2. With the rising cost of living and recession looming overhead, people may spend less money on entertainment than they might have a year or two ago.
3. Comic books are not as popular. Case in point: a best-selling comic book could expect to sell 300,000 copies during its heyday in the late 1970s, but now a similar title would be lucky to sell 50,000.
4. When Marvel decided to start producing its own films, the risk vs. reward became greater. If one of their movies is a flop, it could hurt them pretty badly.
5. Marvel has completely withdrawn from direct toy business, which they may regret if the rest of their self-produced films are as successful as Iron Man and The Incredible Hulk.

Editor's Note:

brass is a quarterly publication, and as such, there could be significant information, news, or price changes that may differ from resources available at the time this article was written. All analysis is meant for educational purposes. You should not make decisions based on information contained in brass without the advice of a qualified professional advisor.

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Jennie's bottom line: There are a lot of "ifs" to be considered where Marvel is concerned. I would be interested in taking another look after a year without a recent blockbuster success to lean on. Chris' bottom line: I love this stock. This is only the third time I've given the thumbs up in three years, baby! It generates monster free cash flow and is expanding internationally.