Cramer’s ‘Hunger Games’ Play
The highly anticipated “The Hunger Games” movie will be a giant needle mover for Lions Gate Entertainment, “Mad Money” host Jim Cramer said Monday.
“You need to get in this stock ahead of the March release date,” Cramer said, “even as Lions Gate has already run up massively since the beginning of the year, rallying 35 percent all on the buzz for 'The Hunger Games.'"
While the wildly successful Harry Potter films were barely enough to move the needle at Time Warner , Cramer thinks “The Hunger Games” will be different for Lions Gate . That's because Loins Gate is a small, independent production company with a market cap of $1.5 billion, so it will take a lot less to move the needle.
The release of "The Hunger Games"—expected to be a blockbuster—will give the movie division a huge boost, he said. The film already has a huge fan base and built-in sequel potential thanks to the trilogy—the first book alone sold more than 16 million copies.
“Let's assume the movie grosses $200 million at the domestic box office ... That would mean about $125 million in profits for Lions Gate,” Cramer said. “If each successive sequel generates 10 percent more profits ... then the entire franchise could end up being worth $400 million to the company.”
He thinks Loins Gate is cheap at these levels, and would buy it whenever it dips between now and the release of “The Hunger Games.”
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