Lions Gate: ‘Hunger Games’ Is Just the Start

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Hollywood’s next blockbuster is set to hit theaters today.

The Hunger Games is the film adaptation of the first book in Suzanne Collins’ dystopian trilogy, and if you’re planning  to see it, have a second choice for viewing prepared  — popular showtimes at theaters across the nation are already sold out.

Fandango announced yesterday that the movie has sold more advance tickets on its website than any other non-sequel ever, with more than 2,000 showtimes sold out. The Hunger Games currently accounts for a staggering 92% of Fandango’s daily ticket sales.

All this hype is propelling independent film studio Lions Gate Entertainment (NYSE:LGF) into the orbit of Hollywood’s biggest — not to mention sending its stock soaring.

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

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 because of the amount of content in the book and to maximize revenue from the franchise.

The company also has a television studio that has been creating 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. The studio is currently making Anger Management, starring Charlie Sheen, for FX. If the first 10 episodes hit a certain benchmark, FC is committed to 90 more.

This has been a fast-moving stock in the last several months due to the explosive popularity of The Hunger Games franchise. I recently upgraded Lions Gate to a “strong buy.” But be careful — this type of quick mover can change direction quickly.


Article printed from InvestorPlace Media, https://investorplace.com/2012/03/are-you-hungry-for-lions-gate-entertainment-lgf/.

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