Lions Gate reports Q1 profit, smashing estimates

Alas, not everything was rosy. Check out the cash-flow statement. Lions Gate used slightly more cash in the quarter for operating activities than it did in the comparable period. And the balance sheet shows a decline in cash and cash equivalents.

Still, it was Lions Gate's day. The Mandate Pictures asset was a nice driver. Sam Raimi's Drag Me to Hell was cited as a positive contributor, as were two other Mandate projects, Juno and Passengers. DVD sales were weak, though, with revenues in that department declining 6%.

As I look through the release, I have to admit, I can understand how buyers exhibited a positive attitude toward the results. Am I sorry I didn't trade the stock? Yes and no. Yes, because human emotion simply dictates a minimal quantity of sorrow for opportunity costs. No, because when you consider the wild swing to the upside that the stock saw yesterday, you have to remember that it easily could have gone the other way. It's not like Lions Gate is a blue-chip favorite of the institutional set. It's more volatile than a Time Warner (NYSE: TWX) or a Disney (NYSE: DIS).

Truthfully, though, I want in on Lions Gate. My instinct tells me I could catch some quick, profitable trade with it. My instinct has been telling me that for a while, now, but after yesterday's price action, I'm even more primed to watch the momentum. I will not buy, though, until some sort of dip asserts itself. And I remain cautious on the whole story, especially after evaluating the cash flow. I'd really like to see that part of the thesis improve.

Disclosure: I own Disney; positions can change without notice.