Growth Stock Portfolio: 12 Stock Picks By Warren Buffett

3. Liberty Media Corporation (NASDAQ:FWONK)

5-year average revenue growth (YoY): 17.14%

Formula One (F1) is a major international motorsport organization that owns the commercial rights to the Formula One World Championship, an annual series of motor races that spans approximately nine months. Liberty Media Corporation (NASDAQ:FWONK) primarily operates through its Formula One (F1) group, which focuses on motorsports and entertainment.

According to management’s fiscal third quarter figures for 2024, the current Formula One season is extremely competitive, with the championships for both manufacturers and drivers coming to an end. F1 has done well financially, as seen by a 15% increase in revenues and a 21% increase in adjusted operating income before depreciation and amortization (OIBDA) so far this year. Two more races this season, new collaborations, and enhancements to F1 TV and hospitality services are all responsible for the income growth. Notably, to increase its market presence and global sponsorships, Liberty Media Corporation (NASDAQ:FWONK) has inked new business contracts with firms like American Express and LVMH.

F1’s Term Loan B has been refinanced by Liberty Media Corporation (NASDAQ:FWONK), which has extended loan maturities and decreased interest margins to increase financial flexibility. The fact that a sizable amount of F1’s debt is at fixed rates offers stability against changes in interest rates.

TD Cowen maintained its buy rating on Liberty Media Corporation (NASDAQ:FWONK) shares and increased their price target from $81 to $88. Given past patterns and unique market circumstances, the company believes the European Commission will likely approve the MotoGP acquisition, and they anticipate that predictions for 2025 will rise.

Cooper Investors Global Equities Fund stated the following regarding Formula One Group (NASDAQ:FWONK) in its Q4 2024 investor letter:

“The largest contributors to returns were Booking Holdings (BKNG) and Formula One Group (NASDAQ:FWONK). FWONK is the owner the Formula One, the oldest and most prestigious global motor racing competition. As described in our September Quarterly Letter with our commentary on TKO Holdings, we are attracted to Sports Content assets FWONK’s operating trends continue to be strong on the track and with fan engagement, this is driving incremental monetisation. including the announcement in October of LVMH signing a 10-year global partner agreement, outbidding legacy sponsor Rolex. We continue to see significant value latency in FWONK, including improved monetisation across their key value drivers (Media Rights, Race Promotion and Commercial), the recent acquisition of MotoGP, and the enhanced strategic value from the impending spin-off of Liberty Live Group, which will result in FWONK converting from a tracking stock to an asset backed company.”