Are You Hungry for Lions Gate Entertainment?

This Friday, the next blockbuster is set to hit theaters and take Hollywood by storm. The Hunger Games is the film adaptation of the first book in Suzanne Collins’s dystopian trilogy, but if you’re planning on watching it, be prepared to stand in line—already theaters across the nation are sold out.

In fact, Fandango announced yesterday that the movie has sold more advance tickets on its website than any other non-sequel ever. The Hunger Games currently accounts for a staggering 92% of Fandango’s daily ticket shows, and already the futuristic action film is sold out at more than 2,000 showtimes.

All this hype is propelling independent filmmaker Lions Gate Entertainment (LGF) into the orbit of Hollywood’s biggest studios—not to mention sending its stock climbing.

Shares have surged nearly 90% so far this year on the back of the company’s acquisition of Summit Entertainment, owner of the incredibly popular Twilight vampire films, and the company’s rights to both Hunger Games and a series of science-fiction novels dubbed Ender’s Game. Finally, a third potential series, based on a dystopian series called Chaos Walking, is in development.

The Hunger Games series is planned to be released as four movies, similar to Twilight. The last book will be split into two movies both due to the amount of content in the book, and also to maximize revenue from the franchise.

Not to mention that the company has a television segment that has had hit franchises for several years including the critically acclaimed Mad Men and Weeds. The company received about 22% of its revenue in 2011 from TV production, and Lions Gate is currently making Anger Management, starring Charlie Sheen, for FX. If the first 10 episodes hit a certain benchmark, FC is committed to another 90.

Now, this has been a fast-moving stock in the last several months due to the explosive popularity of The Hunger Games franchise. In my free Portfolio Grader tool, the stock receives a C for its Fundamentals—weighed down by F’s in Sales Growth and Earnings Momentum—but a solid A for its Quantitative Grade based on the recent buying pressure that shares have enjoyed. As a result, I recently upgraded Lions Gate to an A, a "Strong Buy," two weeks ago. But be careful—this type of quick mover can change grades quickly, so be certain to remain on top of the stock by bookmarking my Portfolio Grader website.

What do you think about the stock? Do you have plans to see The Hunger Games this opening weekend—or are you a hardcore fan who will be waiting in line for one of the many Thursday midnight showings? Let me know by posting to my Facebook page.

Louis Navellier

Louis Navellier

More Louis Navellier



RSS Feed

Little Book

InvestorPlace Network