With the ‘Divergent’ Movie Franchise, Lions Gate Stock Looks Like a Winner

Three Fools take to the Internet to discuss the poorly reviewed opener in Lions Gate’s newest franchise attempt.

Mar 30, 2014 at 12:58PM

Will audiences continue to come out for Lions Gate Entertainment's (NYSE:LGF) Divergent movie adaptation despite poor reviews? Host Ellen Bowman puts this question to Fool analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up On Wall Street, The Motley Fool's web show in which we talk about the big-money names behind your favorite movies, toys, video games, comics, and more.


Theo James and Shailene Woodley star in Divergent. Credit: Lions Gate Entertainment.

Nathan says that there's already a built-in fan base for the series thanks to strong sales of author Veronica Roth's books. The first two novels -- Divergent and Insurgent -- had sold more than 2.6 million copies as of last year at this time. The third novel, Allegiant, is still third on Amazon.com's list of best sellers among teen science fiction and romance books. The Kindle e-book version ranks fourth overall among paid books, with Divergent and Insurgent taking the top two spots, respectively.

Tim notes that Divergent already boasts a rare 'A' CinemaScore, which should lead to positive buzz and a steady audience. Current tracking has the movie earning another $25 million at the U.S. box office over the weekend, putting its two-week total at about $94 million domestic. Foreign results are still largely unknown at this point.

What we do know, Tim says, is that investors have sold off shares of Lions Gate on expectations that Divergent movie franchise can't be what Twilight was or what The Hunger Games is. Maybe so, but Lions Gate has only had two strong, teen-driven franchises in theaters in the same year once before -- when The Hunger Games paired with Twilight: Breaking Dawn-Part 2. Spectacular results followed.

We'll see a similar pairing this November, when The Hunger Games: Mockingjay-Part 1 joins Divergent on this year's movie slate. Tim says the combination could create substantial upside for Lions Gate investors, especially if Divergent goes on to produce anywhere near what 2008's Twilight did.

Now it's your turn to weigh in. Have you seen the Divergent movie? Do you plan to? Please watch the video as Ellen puts Tim and Nathan on the spot, and be sure to check back here often for more 1-Up On Wall Street segments.

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Ellen Bowman and Nathan Alderman own shares of Amazon.com. Tim Beyers doesn't own shares in any of the companies mentioned at the time of publication. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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