O’keefe Stevens Advisory, an investment advisory firm, released its second-quarter 2023 investor letter. A copy of the same can be downloaded here. The first half of 2023 was dominated by the tech sector. The proliferation of artificial Intelligence led to staggering moves for large-cap companies. Year-to-date, the S&P was ~16% up. At the end of the second quarter, the top 5 holdings of the portfolio represented ~40% of assets. In addition, please check the fund’s top five holdings to know its best picks in 2023.
O’keefe Stevens Advisory highlighted stocks like Sphere Entertainment Co. (NYSE:SPHR) in the second quarter 2023 investor letter. Headquartered in New York, New York, Sphere Entertainment Co. (NYSE:SPHR) engages in live entertainment and media services. Sphere Entertainment Co. (NYSE:SPHR), formerly known as Madison Square Garden Entertainment Corp, changed its name in April 2023. On July 21, 2023, Sphere Entertainment Co. (NYSE:SPHR) stock closed at $38.36 per share. One-month return of Sphere Entertainment Co. (NYSE:SPHR) was 39.39%, and its shares gained 43.85% of their value over the last 52 weeks. Sphere Entertainment Co. (NYSE:SPHR) has a market capitalization of $1.326 billion.
O’keefe Stevens Advisory made the following comment about Sphere Entertainment Co. (NYSE:SPHR) in its second quarter 2023 investor letter:
“We initiated a new position during the quarter in Sphere Entertainment Co. (NYSE:SPHR). Building on the previous paragraph, Sphere is a recent remain-co after spinning off MSG Entertainment. This $1B market cap, $2B Enterprise Vale business is small, uncertain, and underfollowed and is precisely the type of investment we seek. The unique, state-of-the-art entertainment venue has 17,500 seats, 23 VIP suites, and the most advanced sound and highest resolution screen spanning three football fields. The Sphere illuminated the world for the very first time on July 4th. It’s challenging to get a genuine appreciation of the breadth and scale of this engineering masterpiece. The exterior is a 580,000 SF fully programmable LED screen. Expect this to be the Time Square of Las Vegas.
Small – With a $1B market cap and $2B enterprise value, the potential investor base is small institutions and retail investors.
Uncertain – Announced in 2018 with an expected finish date in 2021, cost overruns of $1.2B, supply chain challenges, and project shutdowns during covid pushed the open date to September 2023. It was initially estimated to cost $1.2B. However, the expectation is that it will now cost $2.4B. Assuming no more delays, U2 will open the venue in September. The economics of the venue are unknown. U2’s performance and in-house production “Postcard from Earth” are the only shows announced. Given the delays, a litany of shows will get announced when the Sphere officially opens.
Underfollowed – Given the recent spin-off and unknown business economics, the number of analysts following this name is minimal and likely overstated as analysts get up to speed on the separated entities. As the venue stabilizes, we expect more coverage and attention will re-rate the stock closer to its fair value.”
Sphere Entertainment Co. (NYSE:SPHR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. We discussed Sphere Entertainment Co. (NYSE:SPHR) in another article and shared McIntyre Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
