Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Live Nation Entertainment, Inc. (NYSE:LYV) to find out whether there were any major changes in hedge funds’ views.
Is Live Nation Entertainment, Inc. (NYSE:LYV) a buy, sell, or hold? Hedge funds were getting more optimistic. The number of long hedge fund positions inched up by 3 lately. Live Nation Entertainment, Inc. (NYSE:LYV) was in 40 hedge funds’ portfolios at the end of June. The all time high for this statistic is 50. Our calculations also showed that LYV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Gabriel Plotkin of Melvin Capital Management
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Do Hedge Funds Think LYV Is A Good Stock To Buy Now?
At Q2’s end, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the first quarter of 2020. By comparison, 44 hedge funds held shares or bullish call options in LYV a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the biggest position in Live Nation Entertainment, Inc. (NYSE:LYV), worth close to $264.1 million, comprising 0.9% of its total 13F portfolio. The second largest stake is held by Melvin Capital Management, led by Gabriel Plotkin, holding a $227.7 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish contain Ken Griffin’s Citadel Investment Group, Murray Stahl’s Horizon Asset Management and Amir Mokari’s Emerson Point Capital. In terms of the portfolio weights assigned to each position Emerson Point Capital allocated the biggest weight to Live Nation Entertainment, Inc. (NYSE:LYV), around 7.69% of its 13F portfolio. Columbus Point is also relatively very bullish on the stock, setting aside 2.78 percent of its 13F equity portfolio to LYV.
Consequently, key hedge funds have jumped into Live Nation Entertainment, Inc. (NYSE:LYV) headfirst. JS Capital, managed by Jonathan Soros, assembled the most outsized position in Live Nation Entertainment, Inc. (NYSE:LYV). JS Capital had $39.7 million invested in the company at the end of the quarter. Gabriel Plotkin’s Melvin Capital Management also made a $26.3 million investment in the stock during the quarter. The following funds were also among the new LYV investors: Cliff Asness’s AQR Capital Management, Canhui Ou’s One01 Capital, and Jordan Moelis and Jeff Farroni’s Deep Field Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Live Nation Entertainment, Inc. (NYSE:LYV). These stocks are Darden Restaurants, Inc. (NYSE:DRI), Smith & Nephew plc (NYSE:SNN), Hewlett Packard Enterprise Company (NYSE:HPE), Akamai Technologies, Inc. (NASDAQ:AKAM), Ulta Beauty, Inc. (NASDAQ:ULTA), HEICO Corporation (NYSE:HEI), and Insulet Corporation (NASDAQ:PODD). This group of stocks’ market valuations resemble LYV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DRI | 44 | 890301 | -5 |
| SNN | 13 | 119901 | 2 |
| HPE | 34 | 1015096 | 7 |
| AKAM | 30 | 273261 | 5 |
| ULTA | 40 | 1213090 | -6 |
| HEI | 41 | 644494 | -4 |
| PODD | 38 | 1447274 | -1 |
| Average | 34.3 | 800488 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.3 hedge funds with bullish positions and the average amount invested in these stocks was $800 million. That figure was $882 million in LYV’s case. Darden Restaurants, Inc. (NYSE:DRI) is the most popular stock in this table. On the other hand Smith & Nephew plc (NYSE:SNN) is the least popular one with only 13 bullish hedge fund positions. Live Nation Entertainment, Inc. (NYSE:LYV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LYV is 75.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on LYV as the stock returned 11.9% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
