Broyhill Asset Management, an investment management firm, published its second-quarter 2021 investor letter – a copy of which can be downloaded here. Since the availability of vaccines was announced in the fourth quarter of last year, the portfolio has appreciated materially, generating strong absolute performance and attractive returns relative to broad market indices. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Broyhill Asset Management, the fund mentioned Madison Square Garden Entertainment Corp. (NYSE: MSGE) and discussed its stance on the firm. Madison Square Garden Entertainment Corp. is a United States-based entertainment company with a $2.4 billion market capitalization. MSGE delivered a -30.93% return since the beginning of the year, while its 12-month returns are up by 2.18%. The stock closed at $72.55 per share on August 23, 2021.
Here is what Broyhill Asset Management has to say about Madison Square Garden Entertainment Corp. in its Q2 2021 investor letter:
“We established a position in Madison Square Garden Entertainment (MSGE) during the first half, as shares plummeted following the announcement of the company’s proposed acquisition of MSG Networks. Unfortunately, the stock has continued to decline in the interim as some investors continue to digest the merger while others simply decide to cut and run given the increasingly complexity of the story.”
pedro-bariak-EJ__AkAWkA8-unsplash
Based on our calculations, Madison Square Garden Entertainment Corp. (NYSE: MSGE) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. MSGE was in 19 hedge fund portfolios at the end of the first half of 2021, compared to 23 funds in the previous quarter. Madison Square Garden Entertainment Corp. (NYSE: MSGE) delivered a -18.51% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest-growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.
Disclosure: None. This article is originally published at Insider Monkey.
