We recently compiled a list of the 10 Best Stocks to Buy According to John W. Rogers of Ariel Investments. In this article, we are going to take a look at where Madison Square Garden Entertainment Corp. (NYSE:MSGE) stands against John W. Rogers’ other stock picks.
John W. Rogers Jr. is a prominent American investor and hedge fund manager who serves as the chairman, CEO, and CIO of Ariel Investments. Rogers graduated from Princeton University in 1980 and spent two and a half years as a stock broker at William Blair. Three years later, he founded Ariel Investments, the first Black-owned mutual fund company in the United States, with $200,000 supported by family and friends. Howard University would be Ariel Investments’ initial customer, with the firm receiving $100,000 to manage its endowment. The next year, the city of Chicago granted Ariel $1 million to operate a pension plan. By 2009, Ariel Investments was managing $3.3 billion in assets, which has since increased to a staggering $12.9 billion.
Notably, the investor’s flagship Ariel Fund’s faced one of its first hurdles back on October 19, 1987, the day of the crash known as Black Monday. The next major test came after the dot-com crisis in 2000, with the Ariel Fund rebounding strongly, returning 29% that year and 14% in 2001. During the 2008 financial crisis, Rogers’ investments in equities, such as real estate investment firm CBRE Group and newspaper publisher Gannett, caused the fund to lose 48% before returning 63% in 2009.
Rogers appreciates patience as he looks for companies that he believes will reach their full potential in a set period of years. This strategy of scooping up value stocks, pioneered by famed investors Warren Buffett and Benjamin Graham, involves buying stocks whose worth may be undervalued by the market. Speaking on a Bloomberg Invest Conference, the investor stated that market enthusiasts might get overly focused on short-term trends, and those prepared to look three or five years ahead may still uncover opportunities.
Ariel Investments remains steadfast in its belief of value investing, even within the current market climate. This confidence in its strategy was reaffirmed in the fund’s Q1 2025 Investor Letter. Here is what Ariel Fund had to say:
Most major U.S. indices ended the first quarter of 2025 in the red, with investors fleeing to safety as optimism for another year of U.S. outperformance driven by economic momentum and the new administration’s pro-business stance was quickly replaced by tariff fears and policy uncertainty. The Magnificent Seven, which drove most of the markets gains over the last three years, led the decline, falling nearly -15%. Value bested growth and large caps held up better than their small cap brethren. International equity markets, led by Europe and China, surged—delivering their strongest quarterly outperformance versus the U.S. in 15 years. Meanwhile, deteriorating confidence and apprehension about a global trade war is fueling recession fears. While Wall Street sits on edge and markets remain erratic, we are actively leaning into the volatility by judiciously acquiring the downtrodden shares of quality companies whose value should be realized over the long term.
Our Methodology
For this list, we picked stocks from Ariel Investments’ 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Stagehands setting up the equipment for a live entertainment event.
Madison Square Garden Entertainment Corp. (NYSE:MSGE)
Ariel Investments’ Stake as of Q4: $270.7 million
Number of Hedge Fund Holders: 46
Madison Square Garden Entertainment Corp. (NYSE:MSGE), a spinoff of Sphere Entertainment Co., is a live entertainment company that organizes concerts and event entertainment experiences at well-known venues like Radio City Music Hall and Madison Square Garden.
On March 12, Wolfe Research raised Madison Square Garden Entertainment Corp. (NYSE:MSGE) to Outperform from Peer Perform, noting the stock’s undervaluation and solid growth potential in the live entertainment industry. The firm also set a price target of $46, citing increased revenues from the Radio City Christmas Spectacular and consistent demand at Madison Square Garden. Furthermore, with MSGE working on a six- to nine-month booking cycle, the company is projected to give insight into its 2026 event pipeline by this summer, which could increase investor confidence in its future earnings.
In its 91st holiday season, Madison Square Garden Entertainment Corp. (NYSE:MSGE) sold roughly 1.1 million tickets to 200 shows, compared to over 1 million tickets sold to 193 shows the previous season. Revenue from entertainment offerings remained firm year-over-year at $318.28 million, owing primarily to reduced event-related revenues, which were significantly offset by increased revenues from the Christmas Spectacular production. In addition, food, beverage, and merchandise revenues rose 1% year-over-year to $59.3 million due to more Knicks and Rangers games at The Garden and more Christmas Spectacular performances.
Overall MSGE ranks 2nd on our list of John W. Rogers’ stock picks. While we acknowledge the potential for MSGE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MSGE but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
