High noon for the movie business may not be a stock bonanza

As the languor of summer settles over the country, one only has to follow the long line of giggly teens to find a box office. If you're in the business of selling cool comfort, greasy popcorn, and Sylvester Stallone, this is it. Through June, July, and August the motion picture industry rakes in the lion's share of its profits -- 30 to 40 percent of its annual take.

Even as folks were queuing up under marquees on Main Street last week, the ranks of investors on Wall Street kept stocks generally moving upward, albeit in fits and starts. The Dow Jones industrial average closed at a new high on Friday, 1,885.90, up 9.19 points in five days of relatively light trading. Comments by Federal Reserve chairman Paul Volcker characteristically confused the markets. And no clear consensus has developed on whether or not the economy will need another jolt of lower interest. Analysts say that technically the market may consolidate its recent gains for a few more weeks.

Equity investors looking to cash in on the perennial burst of cinematic escapism may be disappointed. Most of the entertainment company stocks have become fully valued. ``Disney, MCA, Warner,'' ticks off Harold Vogel at Merrill Lynch, ``are not cheap stocks.'' Investors moved on these issues early this year to capitalize on this summer's discover-America travel boom. On average, prices jumped 33 percent last quarter.

And there's another rub. There simply aren't too many pure equity investments in moviemaking. Suppose, for instance, that Stallone's ``Cobra'' becomes that rare blockbuster film, totaling $100 million in gross ticket sales. The biggest share, about $30 million, would go to Warner Communications for distributing the film. Now that kind of money could keep Sly Stallone outfitted with laser-guided machine guns for several sequels. But it's not terribly significant when added to the Warner conglomerate's $2.4 billion gross revenues expected this year.

Also, this is a risky business. The fickle taste of the masses rules. Even a shoo-in such as ``Cobra'' may not reach the $100 million mark. Variety reports that ``Cobra'' ticket sales fell sharply in the week after its Memorial Day opening. (``Cobra'' may be shot down by Paramount's ``Top Gun,'' which is drawing well.)

But E. F. Hutton & Co.'s Misia K. Dudley holds out some hope for would-be Wall Street movie moguls. ``Year after year these companies look overpriced. And if you take away the glitz in the glamour, the earnings of these companies are not that spectacular.'' Still, prices continue upward because ``people just love to have a piece of this action.''

One speculative entree to fame (and perhaps fortune) made its debut last week. Dino De Laurentiis, in colloboration with PaineWebber, issued stock in a new movie production company, De Laurentiis Entertainment Group. The new issue of 1.85 million shares was priced at $12 a share and promptly ran up to $19 on the American Exchange. The company's first release, ``Raw Deal,'' starring muscle man Arnold Schwarzenegger, opened last Friday.

``This stock will do well,'' Ms. Dudley predicts. ``It's a big name but has no real record. I think you'll see it get a six- to eight-month honeymoon on Wall Street until we get something to look at.''

But she cautions that Mr. De Laurentiis, the movie mogul, has made his mark with some expensive films. The prospectus indicates that the company will make medium-cost flicks in the $7 million-to-$9 million range.

``De Laurentiis is not used to making cheap films. That's a whole new game,'' she says. ``If he goes $2 million over budget on a $25 million film, that's not as critical as a $2 million overrun on a $7 million film.

Dudley also likes Heritage Entertainment, a longer-term, offbeat speculative run. The small-capitalization Los Angeles company specializes in family-oriented made-for-TV films and programs. It owns the rights to ``Gentle Ben'' and ``Flipper,'' and it recently added to its library 1,000 episodes of wildlife and family programs. Those should sell well abroad, says Dudley, especially in the Soviet Union. The company recently bought the International Film Exchange, which exchanges films in and out of Europe and the Soviet Union. Heritage is now trading in the $9-to-$11 range, and Dudley expects it to go for $20 within the next 18 months.

An established entertainment concern still looks like a solid investment to Dennis Rosenberg at Oppenheimer & Co. Although Disney Productions has rocketed to new 12-month highs in recent months, and Goldman, Sachs & Co. lists the stock as a ``hold,'' Mr. Rosenberg still has a buy signal on it: ``I think it will continue to outperform the market.''

Several factors should buoy the price, according to Rosenberg. Later this month Disney will release the comedy ``Ruthless People,'' starring Danny DeVito and Bette Midler. Dudley at Hutton agrees that this could be a hit similar to ``Down and Out in Beverly Hills.'' Disney is also producing a television show based on the Beverly Hills movie.

Rosenberg likes Disney mainly because management is doing the right things, as he puts it. ``Attendance in the parks is strong, and they're aggressively increasing prices at the ticket office.'' He doesn't think the recent upturn in travel to Europe is going to hurt Disney World sales. ``That's a `destination' resort. The reservations are made. Advance bookings are very strong.''