10 Best Spin Off Stocks to Buy According to Hedge Funds

6. Madison Square Garden Entertainment Corp. (NYSE:MSGE)

Number of Hedge Fund Holders: 35

Madison Square Garden Entertainment Corp. (NYSE:MSGE), a spinoff of Sphere Entertainment Co., is a live entertainment firm that produces concerts and show event entertainment experiences at well-known venues such as Radio City Music Hall and Madison Square Garden.

Guggenheim analysts maintained their positive outlook on Madison Square Garden Entertainment Corp. (NYSE:MSGE), reaffirming their Buy rating and $48 price target. Despite recent headwinds on the stock’s performance, the firm has selected Madison Square Garden Entertainment as its Best Idea for the calendar year 2025. Guggenheim analysts believe MSGE will still generate near double-digit growth in adjusted operating income (AOI) for 2025.

Ariel Fund stated the following regarding Madison Square Garden Entertainment Corp. (NYSE:MSGE) in its Q4 2024 investor letter:

“Lastly, Madison Square Garden Entertainment Corp. (NYSE:MSGE) underperformed in the quarter. Despite the delivery of strong earnings results, shares traded lower following a reduction to fiscal 2025 adjusted operating income guidance. The revision was driven by unique circumstances surrounding concert tour cancellations and higher costs associated with bringing sponsorship sales in-house. Nonetheless, with marquee assets such as New York’s Madison Square Garden, Radio City Music Hall, Beacon Theatre and The Chicago Theater, we believe MSGE is well positioned to capitalize on strong demand for live entertainment. Additionally, new sales and renewal activity in the company’s hospitality business remains robust. MSGE recently announced multi-year sponsorship deals with Lenovo, its subsidiary Motorola Mobility, the Department of Culture and Tourism-Abu Dhabi, as well as a multi-year extension of its sponsorship deal with Verizon. In our view, MSGE’s portfolio generates stable cash flow that should enable further deleveraging. At current levels, the company is trading at a significant discount to our estimate of private market value.”