NEW YORK (TheStreet) -- Shares of Lions Gate Entertainment were falling 6.5% to $31.50 on Wednesday following the announcement that the entertainment company's largest shareholder will sell 10 million shares in an underwritten secondary offering. MHR Fund Management will sell 10 million common shares of Lionsgate at a public offering price of $32 a share. The underwriters of the offering will have a 30-day option to purchase up to an additional 1.5 million shares. Lionsgate Chairman Mark Rachesky is the head of MHR Fund Management. MHR Fund Management currently owns 51.3 million shares of Lionsgate. The company will own more than 41 million shares of Lionsgate after the offering, and will remain the entertainment company's largest shareholder. The secondary offering is expected to close on April 13, 2015. Lionsgate will not receive any proceeds from the offering. "Why the heck does he need to sell ten million shares, especially after a guidedown," Jim Cramer said. "How do you spell BRUTAL" TheStreet Ratings team rates LIONS GATE ENTERTAINMENT CP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: "We rate LIONS GATE ENTERTAINMENT CP (LGF) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows: The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels. LIONS GATE ENTERTAINMENT CP has improved earnings per share by 10.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LIONS GATE ENTERTAINMENT CP reported lower earnings of $1.02 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.51 versus $1.02). Net operating cash flow has increased to $44.90 million or 27.31% when compared to the same quarter last year. Despite an increase in cash flow, LIONS GATE ENTERTAINMENT CP's cash flow growth rate is still lower than the industry average growth rate of 47.16%. 46.68% is the gross profit margin for LIONS GATE ENTERTAINMENT CP which we consider to be strong. Regardless of LGF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.06% trails the industry average. LGF, with its decline in revenue, underperformed when compared the industry average of 7.2%. Since the same quarter one year prior, revenues fell by 10.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share. You can view the full analysis from the report here: LGF Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
Click to view a price quote on LGF. Click to research the Media industry.
from Latest TSC Headlines http://ift.tt/1CfntOh
No comments:
Post a Comment