Lions Gate Entertainment Corp. (LGF)
— Add to Watch-List 19 February 2010; market closed (The previous issue was broadcast on 2/11/10)
Preemptive Profit-Positioning (add to watch-list): Lions Gate Entertainment Corp. (LGF NYSE): $5.23 X $5.25 Lions Gate Entertainment – the largest of the independent film studios – is making headlines on a couple of different fronts with its film, Precious, being nominated for six Academy Awards including best picture, and billionaire investor Carl Icahn launching a tender offer to boost his stake in the company to 30% from 19% with a $79 million investment. If approved by LGF shareholders, Icahn would become the largest shareholder in the company. Icahn’s latest moves could signal that he is seeking to gain more control over the company’s merger and acquisition activities: currently MGM and Miramax are two rumored targets. Or, from more of a contrarian viewpoint, Icahn’s strategy could very well be to turn the tables and entice a buyout bid from industry leader Disney. Either way, the next few business quarters should be very interesting for Lions Gate, which owns a strong catalog of movie franchises like the Saw and Hostel horror series and the Transporter action series. Although Lions Gate currently has more debt than cash and posted a fiscal third-quarter loss that was wider than analysts on Wall Street were expecting – the company has shown improved revenues from its television shows and its TV Guide business and has implemented fiscal measures to lower its theatrical marketing and overhead costs. I view Icahn’s involvement in Lions Gate as a positive. While it’s difficult to predict which avenue the company will take, I see Lions Gate as having substantial upside potential from a shareholder perspective. Now is the time to conduct your own due diligence on Lions Gate Entertainment. You can view the company’s recent press releases and SEC filings at www.finance.yahoo.com under the symbol LGF. I am officially adding Lions Gate Entertainment (LGF) to our watch-list of preemptive profit-positioning candidates. Stand by for now. This publication is based exclusively on information generally available to the public and does not contain any material, non-public information. Information is obtained from sources believed to be reliable, but the information cannot be guaranteed as to its accuracy or completeness. The author is not, and does not purport to be, a registered investment adviser and does not accept compensation from publicly traded companies in return for his commentary. The objective of this newsletter is to present Situational Analysis and to provide progressive implementation of the author’s proprietary Situational Strategy Templates. No statement or expression of opinion, or any other matter herein, directly or indirectly, shall be construed as an offer to sell or the solicitation of an offer to buy the securities mentioned. Readers should not view this publication as offering personalized investment advice, and must individually determine the suitability of investments discussed for inclusion in their own portfolio. Past performance does not guarantee future results. Reprints or redistribution of this copyrighted material is allowed only by written permission from Nat-Con Publishing. To opt-out from receiving future publications, please click here. |
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