DreamWorks Animation SKG Inc. is an independent producer of computer-generated animated films. It is best known for Shrek, Madagascar and more recently Kung Fu Panda, among many other films. It generates sales and profit primarily via the boxoffice and DVD release of its films, as well as revenue from consumer packaged goods that are marketed based on the strength of its intellectual property. We recommend DWA due to an improved slate of releases, growing nontraditional revenue streams and catalog sales, the ongoing potential for share repurchases or a special dividend, and an attractive valuation.