12 Best Leisure Stocks to Buy Right Now

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

Number of Hedge Fund Holders: 46

Madison Square Garden Entertainment Corp. (NYSE:MSGE) is a live entertainment company that provides venues and marquee entertainment content. Its portfolio encompasses a range of venues, including New York’s Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, Beacon Theatre, and The Chicago Theatre. These venues showcase several concerts, sporting events, family shows, and special events for millions of guests annually.

Madison Square Garden Entertainment Corp. (NYSE:MSGE) hosts two professional sports franchises: the National Basketball Association (NBA) Knicks and the National Hockey League (NHL) Rangers. The company also produces, promotes, and presents various sporting events, including college basketball, college hockey, professional boxing, esports, wrestling, mixed martial arts, and more.

The company is seeing strong demand for its offerings in the second half of fiscal year 2025, with consumers increasingly demonstrating their desire for shared in-person experiences. Madison Square Garden Entertainment Corp. (NYSE:MSGE) reported revenues of $407 million in fiscal Q2 2025 and an adjusted operating income of $164 million. The company also welcomed the Rangers and the Knicks for the beginning of their 2024-2025 regular seasons and is seeing positive momentum in its economic arrangements with the teams.

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.”

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