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.”Page 1 of 6 | Next Page