Lion's Gate (LGF)
We are initiating coverage of Lion's Gate (<a href=http://www.zacks.com/research/report.php?type=main&t=LGF>LGF</a>) with a Buy rating. <P ALIGN="left"> With a strong track record of producing critically acclaimed small and mid-budget specialty films, we think Lion s Gate is well positioned to increase market share as the big studios continue to shrink production of specialty films. Further Lion's Gate's large film library should, in our view, spur renewed growth in home entertainment revenue in 2H FY10 as consumer adoption of the Blu Ray format accelerates. <P ALIGN="left"> Although in the coming months we expect the economy and film slate timing to weigh on revenues and EBITDA in all segments, we think the current stock price undervalues LGF s film library, which ultimately generates 80% of the company's free cash flow. <P ALIGN="left">
December 31, 2008 | Filed Under Stock Picks
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