A bull market existed at one place over the weekend: the nation’s movie theatres. Thanks to a huge opening for The Simpsons Movie and good holds for all the other top movies, the weekend box office rose 45% vs. the same weekend a year ago. Since June 29th, when the second quarter started for the theatre companies, the box office is up 14.8%. This figure is well above upper single digit gains built into analyst models.

Th box office comparison should remain favorable but with a more modest gain this weekend with the opening of The Bourne Ultimatum and solid performances from holdovers. In 2006, this coming weekend was the last decent weekend for the summer when Talladega Nights opened to $47 million. The rest of this summer faces easy comparisons with a couple of more films to be released that are expected to do solid business.

The box office is on track to comfortably exceed the all-time summer record set in 2004. According to data compiled from BoxOfficeMojo.com by David Poland of TheHotBlog.com, the box office is presently running $220 million, or 6-7% ahead of 2004. Year-to-date, the box office is now up 5.9%, the second consecutive year of strong growth following last year’s gain of 4%. This year is also on track for the second consecutive gain in tickets sold following a three year slump. This data should put to bed the “going to the movies is dying” theme.

Movie-going is not a great growth a business but it is a stable business that produces significant free cash flow for the theatre companies. Regal Entertainment (RGC), widely owned by Northlake clients, represents a great way to play the summer box office momentum and the overly negative sentiment on the industry. Regal is also attractive in the currently unstable stock market environment as it has a 5.6% current yield. Regal was up 10 cents on Friday and fell just 7 cents, less than one-third of one percent, combined on Thursday and Friday.