5 Best Entertainment Stocks to Buy

3. Formula One Group (NASDAQ:FWONK)

Number of Hedge Fund Holders: 46

Formula One Group (NASDAQ:FWONK) promotes the FIA Formula One World Championship, the biggest single-seater formula racing cars promotion in the world.

Formula One Group (NASDAQ:FWONK) faced multiple headwinds in 2019 and 2020, mostly due to the pandemic. However, after the release of its Netflix documentary “Drive to Survive” and lockdown ease, the company has done wonders on its financial statements. Formula One Group (NASDAQ:FWONK) faced a loss of $2.57 per share in 2020 and recorded an EPS of $0.39 in 2022 and is expected to post an EPS of $1 in 2023. The company saw a 35% increase in its revenue on a YoY basis in its June quarter and an adjusted OIBDA change of 133% to $154 million.

On August 8, Pivotal Research analyst Jeffrey Wlodarczak reaffirmed a Buy rating on Formula One Group (NASDAQ:FWONK)’s shares and raised his price target to $77 from $45 after “strong” Q2 results. The analyst further added that his higher broadcast fees might still be conservative viewing the increased participation in sports rights fees by streaming players.

Here is what East 72 Fund had to say about Formula One Group (NASDAQ:FWONK) in its Q3 2022 investor letter:

“There are two listed SPORTS, both of which have suffered pressures in this respect over past years: World Wrestling Entertainment (WWE) and Formula 1 motor racing (via Liberty Formula 1 tracker stock: FWONA/FWONB/FWONK). We have owned both in the past. A very brief analysis of each is instructive in understanding where and why we do have exposures.

Formula 1 is now virtually unchallenged in its dominance of high end motor sport – the biggest circus on earth. It has a monopoly from FIA on the “World Championship” through to end-2110 Having morphed from a series of races controlled by the teams, then the “legendary” entrepreneur, Bernie Ecclestone, the organisation was acquired by Liberty Media in late 2016. This acquisition has coincided with a rebirth in the sport, with the 7th and 8th “Concorde” Agreements cementing in place the incentives for the major teams to stay in the sport and not attempt a breakaway series…” (Click here to see the full text)