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January 31, 2006

Insider Buying At Lionsgate

A couple of quick follow-ups to my Weekend Box Office Update that support my bullish trading bias on Lionsgate (LGF). First, this weekend's Barron's contained positive commentary on LGF in the Inside Scoop column. The column noted recent insider buying by senior executives along with a big boost in the position of Carl Icahn protégé Mark Rachesky. Rachesky reported a 7.3% position last August but his latest filing shows the stake has been raised by about 2 million shares to 10 million shares, or almost 10% of LGF.

The article quotes Ben Silverman of InsideScore.com as noting that Rachesky has a good track record and LGF represents his second largest holding. I am less impressed by the insider buying by executives as the amounts are rather small. However, last summer, the combination of the initial Rachesky filing and similar-sized buys by executives popped LGF shares. With a series of positive news items in the recent past and coming over the next month, LGF shares could be headed back toward the summer and fall highs in the mid $10 area.

Separately, one message board poster on LGF on Yahoo! (YHOO) noted that the better-than-expected opening for Big Momma's House, with the leading part played by an overweight man posing as as older African-American woman could be good news for LGF's Madea's Family Reunion, which opens the last weekend in February. Madea is a similar character created by Tyler Perry, a rising African-American star.

Posted by Steve Birenberg at January 31, 2006 02:26 PM in LGF