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Hunger Games Should Drive Lions Gate to $18

Tuesday, 3 Apr 2012 | 1:31 PM ET

According to top trader Mike Murphy of Rosecliff Capital, the recent pullback in Lions Gate is a buying opportunity.

Lions Gate has been quite the Wall Street darling of late; earlier in the month the stock shot higher ahead of the release of its blockbuster film The Hunger Games.

But then the stock sold off sharply – as much as 20% after the film’s release, leading to speculation that pros were employing a ‘buy the rumor and sell the news’ strategy.

But Mike Murphy thinks that second half of that strategy – ‘sell the news’ is a mistake.

“The movie didn’t disappoint, right? The results were great.” In fact The Hunger Games is now the highest-grossing film of 2012 after just two weekends in theaters. The movie has taken in $248.5 million since it opened on March 23rd.

Looking at the pullback, although the stock may have been ahead of itself going into the release, Murphy thinks the resulting 20% decline was too much,

“We entered around $13.15,” he says. “Remember this is the first of 3 Hunger Games movies,” he adds. On the success of the franchise alone, Murphy concludes, “”I think it can get up to the $18 range pretty easily.”

Lionsgate Rally to Continue?
The Fast Money Halftime team speaks to Mike Murphy, of Rosecliff Capital and Dan Dicker, of Mercbloc, on Lionsgate's rally since the release of 'The Hunger Games.'







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Trader disclosure: On April 3, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian is long AAPL CALLS; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS; Pete Najarian is long C ; Pete Najarian is long JPM CALLS; Pete Najarian is long MS; Pete Najarian is long C; Pete Najarian is long YHOO; Pete Najarian is long SBUX CALLS ; Pete Najarian is long COP ; Pete Najarian is long PEP; Simon Baker is long JPM; Simon Baker is long GDX; Simon Baker is long MS; Simon Baker is long GLD; Simon Baker is long XLU; Simon Baker is long XLF; Simon Baker is long IBM; Simon Baker is long WMT; Simon Baker is long JOY; Simon Baker is long GMCR; Simon Baker is long ADSK; Simon Baker is long FCX; Simon Baker is long DELL; Simon Baker is long IBM; Simon Baker is long NKE' Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long MSFT; Josh Brown is long AAPL; Josh Brown is long LULU; Josh Brown is long SIRI

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