LGF RatingFrom Biresearch....
Lions Gate Entertainment (LGF $2.25 ASE)
Lions Gate, my favorite for 2001, is becoming a successful mini-major" entertainment producer by
hitting a steady stream of singles and doubles and resisting the temptation to swing for the fences (the
undoing of others in the past). Since 1997 it has assembled and internally grown the key elements,
with current annualized revenues of $300 million U.S… and several Oscars under its belt. It expects
to release about 4 of its own pictures annually and distribute about 15 others. A current release,
Shadow of the Vampire, contains a likely Oscar winning performance by Willem Dafoe. LGF owns
a video distribution business which has recently been strengthened by the recent acquisition of Trimark.
It also owns 45% of Mandalay Pictures, whose first major motion picture, Sleepy Hollow, did $200
million worldwide and its next, Enemy at the Gate, debuts 2/23/01. The Score with DiNero, Brando
and Basset bows in April. LGF also makes television shows, including Mysterious Ways, currently on
NBC (in its second season), MOW's and a lot of reality based television shows such as Wild Rescues
and Ripley's Believe it or Not. They also have an animation arm, Cine-Groupe, which makes cartoon
shows for Sony, Fox Family and others, and a studio in Vancouver with 8 busy sound stages. Recent
People's Choice winner, Dark Angel, is produced here (by another company). LGF may well earn
US$.20 to $.25 in 2001... it trades at just 10 times that, 0.32 times revenues, 3 times EBITDA and
0.6 times book value. The shares are a good candidate to double in 2001.- 1/8/01