“Hunger Games” fever is sweeping the nation, and one small cap stock in particular is reaping the benefits.
Lions Gate Entertainment (NYSE: LGF) shares are up 3.5% this morning after the much-anticipated debut of “The Hunger Games” movie didn’t disappoint at the box office, raking in $214 million globally over the weekend. It was the third-biggest opening weekend ever for a movie, trailing only the “Harry Potter” finale and “The Dark Knight” Batman movie in 2008.
Lions Gate is the movie studio that produced “The Hunger Games”, which was adapted from a bestselling book by author Suzanne Collins. The movie has been a godsend for the relatively small-time studio, which hasn’t been profitable in four years.
Shares of Lions Gate have climbed 80% in 2012. The stock was trading at $7 a share as recently as late October. It’s more than doubled since, to $15.07 a share this morning. During that time the company’s market cap has also doubled, from $950 million to $1.9 billion.
What will continue to make Lions Gate a compelling stock is that the studio also owns the rights to the two sequels to “The Hunger Games” – “Catching Fire” and “Mockingjay” – which are scheduled to be released in the next couple years.
Meanwhile, the success of “The Hunger Games” is just getting started. After its near-record opening weekend, the movie is sure to have a long, prosperous run in theaters. That could help make Lions Gate – which lost $53.5 million last year – a profitable company. And the stock could continue to flourish.