[Beginning of Cramer's verbatim comments for this segment...]

Jim:          Wow, oh hey, we have been getting a lot of calls lately, mostly plaintively, how can you play this 3D? After the gigantic success of “Avatar”, which is now the top grossing movie of all time… over $2b in global box office receipts… a movie that looks so good that you do not even remember the plot, or the characters, let alone remember anything…not that I know… I never leave the dirty linoleum floor I have at home, this is a simulation of what I have at home… I never leave that long enough to go to the movies… and I am also too busy reading conference calls, and conference calls pornography...

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Now, because this is the most interactive show on television… and I take your ideas somewhat seriously… in fact, sometimes your ideas are so good I just take them… Mad Money is going 3D tonight… what, you can’t see this at home? I promise you it looks amazing… no other 64 year old, soon to be 65, according to Wikipedia… which also, by the way, has my non-existent middle name as Joseph, so I guess my Mom was wrong when she named me… anyway, no other man my age looks this good in 3D… we have already seen some great results from companies which benefit from the 3D trend… which I am calling the 3D typhoon, to distinguish from and by homage to a new tsunami… as opposed to the mobile internet tsunami.

Dolby just reported a great number on Wednesday, I cannot believe how great that quarter was… I-Max has been on an upward trajectory since January… I want to announce the joint venture with Discovery Communications, reports next week, should be good… and Sony, reported yesterday, looked fabulous… to launch a new 3D television channel starting in 2011.… wow!… you know what? This is not a fad… I think that it is the next great leap forward for the movie industry… one that is comparable to the change from silent pictures to talkies… or from black and white to color… it is the technology that gives movie theaters the edge over DVD’s, home theater systems, VDR’s, whatever all that stuff is that you time shift, you know what I mean?… and you can watch at home… all that stuff that has been killing the movies… it is a viewing experience that television just can’t duplicate… no matter what, and it is proven to get people back in their seats and buying overpriced popcorn, expensive soda, amazing Whoppers, and Icies… at least when the ice machine is not broken.

So what do I think is the best way to speculate on the 3D typhoon? It is a stock that my friend, buddy, pal Brandon in Texas asked about in last Thursday’s Lightning Round…it is the stock called Cinemark Holdings Inc. (CNK)… this is the third largest movie theater operator in the US … with 426 theaters, 4908 screens worldwide, 296 theaters in the US with 3842 screens… mostly suburban metropolitan areas in the US… as well as 373 3D projectors to play worldwide… and it is that 373 that we are liking … at the time when Brandon asked, I said that Cinemark was a do not buy… but now I am revising that opinion… remonstrating about my own snap judgment, and telling you that this theater company with a notoriously B.I.G 5% yield is our favorite speculative 3D play… I also need to give a major chat out to Brian Ashenberg, my colleague who writes the fabulous “Breakout Stocks” newsletter at TheStreet.com, where I am Chairman… since Brian is the one who sold me on Cinemark when he bought it for Breakout Stocks portfolio…he has been hitting it out of the park regularly… and he kindly pointed me in the right direction, post my Lightning Round answer.

Not only does 3D make it worth going back to the movies, turning a dull movie stock like Cinemark into something sexy … it has also got a world wide market potential of $20b… 2008 the worldwide box office total $28b… in 2009, 3D showings earned over $1b in the US…. but that is only 9.4% of the total domestic box office… by 2015, box office revenues from 3D films could total $9.4b in the US… we want in on that… that is going to represent more than half of the total domestic box office… I have got to tell you that that is incredible growth… I do not have that kind of growth with most companies.

Internationally, now we turn to William Blair which is a pretty good brokerage house … the 3D box office could come $11.1b… it is going to take a little… which is why favor a domestic theater operator like Cinemark… currently there are 17 3D films planned for just 2010... that is up from 12 from 2009... let me see we have “Alice In Wonderland”, we have got “Shrek Forever After”, “ Toy Story 3“, “Megamind”.. all potential block busters… Sony is rolling out the next resident evil movie in 3D in January of 2011, I want to see that.

So why do I like a movie theater operator like Cinemark over the media companies that own the studios? Or some tech stocks that are involved in the 3D process? First, because the benefits from theaters are straightforward with what I consider to be very little downside… average ticket price is, this is really, listen to this… the average ticket price for a 3D film is $3 higher… than an already overpriced ticket for a regular 2D movie…. at the same time, 3D also gets more people into theaters… first for the novelty factor, and then
over the long term, 3D gives the theaters a reason to exist… by providing an experience that most people cannot duplicate on their TV’s at home.

Plus, theater operators like Cinemark are already doing well… 3D just gives them an additional boost so you get a little extra revenue… when the recession first hit, I… the talk of the town was that people would stop going to movies… that did not happen at all… it is like yesterday when we had Allergen, and people thought they would not take Botox, that did not happen either… people’s behavior did not change… instead the dollar amount of ticket sales grew 11% vs. a year earlier in the first half of 2009... the bad half… so far in 2010 they are up 12% year to date… that is amazing.

Cinemark is in the best position to benefit from 3D… it leads the industry in converting its theaters to stadium seating… with 84% of its theaters converted… vs. 78% for Regal, 76% for AMC… anyone who has been to a movie in the last decade knows that stadium seating is better… and it is definitely a more enticing 3D viewing destination… Cinemark also has an Imax alternative called extreme digital camera, XD… huge immersive screens… the company is currently embroiled in a legal battle with Imax over whether it can install XD technology in its existing theaters… but the patent issue does not seem to stop Cinemark from building new XD theaters… there are fewer than 15 of these up and running… the growth potential here could be staggering… Cinemark also has a Latin American kicker… 1011 screens in 12 Latin American countries… it is the number one theater chain in the Brazilian market.

On top of everything else, Cinemark’s management has said that it expects to get $725m in financing for digital projectors from the studios… by the end of the year, it is a hand out… great balance sheet, decent shape, no significant debt coming due anytime soon… and even though the stock is a little more than a point off of its 52 week high, it is trading at 15.7 times earnings… which is much lower than the historical average of 20 times earnings… with a dividend that is zoftig… to say the least… man, I should never have said do not buy on this one.

The bottom line…

[verbatim recap]

[end of segment]

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