DVD rental unit may play well for CoinStar -Barron’s

NEW YORK, Aug 15 (BestGrowthStock) – Coinstar Inc (CSTR.O: ), which
operates 19,000 self-service coin-counting machines in the
United States, could get a boost from its DVD dispensing
machines, according to the Aug. 16 edition of Barron’s.

Coinstar’s Redbox unit has grown into the second-largest
player in the DVD rental business, behind Netflix Inc (NFLX.O: ),
and should benefit Coinstar, whose shares closed at $44.62 on
the New York Stock Exchange on Friday, and have rallied about
60 percent this year, Barron’s said.

Redbox operates about 27,000 self-service DVD kiosks in and
outside stores and restaurants owned by Wal-Mart Stores Inc
(WMT.N: ), Walgreen Co (WAG.N: ) and McDonald’s Corp (MCD.N: ). It
plans to open 8,000 more this year and is on course to generate
more than $1 billion in annual sales in 2010, Barron’s said.

Coinstar shares trade at about 23 times projected 2010
earnings of $2 per share and could hit $3, according to
Barron’s.

In a recent note, Wedbush analyst Michael Pachter wrote
that profits could grow by $1 per share annually over the next
several years as Redbox takes additional market share from
struggling bricks-and-mortar stores, Barron’s said. Pachter has
an “outperform” rating on the shares and a 12-month target of
$59, Barron’s said.

(Reporting by Ilaina Jonas; editing by Gunna Dickson)

DVD rental unit may play well for CoinStar -Barron’s