Ariel Investments, an investment management company, released its “Ariel Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Global markets in 2024 exceeded forecasts, primarily due to the overwhelming success of the “magnificent seven,” or mega-cap technology stocks. Despite the concentration of gains, the optimism was fueled by the U.S. election results, solid earnings growth, and a healthy labor market. The fund returned -0.66% in the quarter trailing both the Russell 2500 Value and Russell 2500 Indices, which returned -0.26% and +0.62%, respectively. Ariel Fund increased +11.80%, outpacing the Russell 2500 Value Index’s +10.98% return and just short of the Russell 2500 Index +12.00% gain, over the trailing one-year period. For more information on the fund’s top picks in 2024, please check its top five holdings.
Ariel Fund highlighted stocks like Madison Square Garden Entertainment Corp. (NYSE:MSGE), in the fourth quarter 2024 investor letter. Madison Square Garden Entertainment Corp. (NYSE:MSGE) is a live entertainment services company. The one-month return of Madison Square Garden Entertainment Corp. (NYSE:MSGE) was 0.73%, and its shares gained 7.56% of their value over the last 52 weeks. On January 28, 2024, Madison Square Garden Entertainment Corp. (NYSE:MSGE) stock closed at $35.86 per share with a market capitalization of $1.738 billion.
Ariel Fund stated the following regarding Madison Square Garden Entertainment Corp. (NYSE:MSGE) in its Q4 2024 investor letter:
“Lastly, Madison Square Garden Entertainment Corp. (NYSE:MSGE) underperformed in the quarter. Despite the delivery of strong earnings results, shares traded lower following a reduction to fiscal 2025 adjusted operating income guidance. The revision was driven by unique circumstances surrounding concert tour cancellations and higher costs associated with bringing sponsorship sales in-house. Nonetheless, with marquee assets such as New York’s Madison Square Garden, Radio City Music Hall, Beacon Theatre and The Chicago Theater, we believe MSGE is well positioned to capitalize on strong demand for live entertainment. Additionally, new sales and renewal activity in the company’s hospitality business remains robust. MSGE recently announced multi-year sponsorship deals with Lenovo, its subsidiary Motorola Mobility, the Department of Culture and Tourism-Abu Dhabi, as well as a multi-year extension of its sponsorship deal with Verizon. In our view, MSGE’s portfolio generates stable cash flow that should enable further deleveraging. At current levels, the company is trading at a significant discount to our estimate of private market value.”
Stagehands setting up the equipment for a live entertainment event.
Madison Square Garden Entertainment Corp. (NYSE:MSGE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Madison Square Garden Entertainment Corp. (NYSE:MSGE) at the end of the third quarter which was 34 in the previous quarter. In the fiscal first quarter 2025, Madison Square Garden Entertainment Corp. (NYSE:MSGE) reported revenues of $138.7 million as compared to $142.2 million in the prior year quarter. While we acknowledge the potential of Madison Square Garden Entertainment Corp. (NYSE:MSGE) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Madison Square Garden Entertainment Corp. (NYSE:MSGE) and shared Ariel Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 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.