Jeffrey To
Long/short equity

Lions Gate Entertainment: Poor Price Action Despite Strong Fundamentals Provides Profitable Entry Point

Since the release of the Hunger Games: Catching Fire, Lions Gate Entertainment (LGF) stock price has exhibited stock movements not reflective of fundamentals. Although this may be typical during the short-term due to emotional trading, particularly for a momentum stock that had previously run up 350% to its peak of $37.81 since January 2012, this price action has lasted months. Currently, LGF stock is trading at $30.72, representing a market capitalization of $4.24 billion. Below, I will outline several events that have transpired since LGF hit its peak: the release of Ender's Game (November 1, 2013); the release of The Hunger Games: Catching Fire (November 22, 2013); the hinting towards the initiation of dividend payments and an increased stock buyback...

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