Is World Wrestling Entertainment, Inc. (WWE) Destined for Greatness?

WWE hasn’t given investors the gains they’ve hoped to see for quite a while, but the company hasn’t given up on its growth efforts. WWE Main Event was launched last summer on the ION network, complementing its deals with Comcast to broadcast Raw and Smackdown. It also launched a kids-focused show on the CW network, Saturday Morning Slam, as part of an agreement with CBS and Time Warner. WWE Studios and Warner Bros are also coming together to co-produce a Flintstones animated movie, to be released in early 2015. This animated feature will allow WWE to promote its brand with young fans and loyal Flintstones enthusiasts alike, at least in theory. It’s tough to say how pro wrestling would be integrated into the story without appearing to be a blatant gimmick. Warner Bros will handle the worldwide distribution, while WWE will market the release of the film.

WWE shares have surged some 30% since June 2012 in anticipation of a Rock-driven pay per view season, and the People’s Champ didn’t disappoint — the 29th iteration of WrestleMania grossed a record $72 million. Television revenues also rose by 15% on a year-over-year basis, aided by an additional hour of the Raw program. Wrestling goes through phases of higher and lower popularity, and it seems that it’s been on the lower end of the sine wave since the last generation of superstars stepped aside. If the faux sport’s popularity stays low for awhile, the overhead of music and merchandising may weigh the company down into losses. The McMahon family’s headlock on voting rights will also hinder any potential changes in direction, which could be worrisome if the company fails to get the public to smell what it’s cooking again.

Putting the pieces together
Today, World Wrestling Entertainment, Inc. (NYSE:WWE) has few of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is WWE Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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