Liberty 77 Capital, a major holder of Lions Gate Entertainment (LGF), recently bought 1,018,107 shares. The buy increased the fund’s position by 10%, and came to a total cost of $6.98 million.
The fund was a buyer a few days before for 2.6 million shares, a 37% increase in holdings at a cost of $17.8 million. Going further back, the fund has been a steady and consistent buyer of shares. Two company insiders were small sellers of shares over the past year.
Overall, Lions Gate insiders own 7.9% of shares, and major holders own the rest of the float.
The entertainment production company is down 22% over the past year. The media space has been challenged with flat revenues over the past year, with Lions Gate seeing a 0.5% drop.
Earnings growth has been negative, but the weakness in shares could be creating a value opportunity. Lions Gate trades at 0.5 times it price to sales, and has a forward price-to-earnings estimate of less than 7.
Action to take: Shares are back at a place of strong support near their 52-week low. Chances of a spike higher in the months ahead make the stock a buy for speculative investors looking for a low double-digit profit in the coming months.
For traders, the June $9 calls, last trading for about $0.60, could see high double-digit returns from any bounce higher. Traders should look to take quick profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.