Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Live Nation Entertainment, Inc. (NYSE:LYV).
Live Nation Entertainment, Inc. (NYSE:LYV) was in 46 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 50. LYV has experienced a decrease in support from the world’s most elite money managers in recent months. There were 50 hedge funds in our database with LYV positions at the end of the third quarter. Our calculations also showed that LYV isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the 21st century investor’s toolkit there are plenty of tools shareholders put to use to assess their holdings. Two of the most under-the-radar tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top money managers can beat the market by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 197% since March 2017 (through March 2021) and beat the S&P 500 Index by 124 percentage points. You can download a sample issue of this newsletter on our website .
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Do Hedge Funds Think LYV Is A Good Stock To Buy Now?
At Q4’s end, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in LYV over the last 22 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Akre Capital Management was the largest shareholder of Live Nation Entertainment, Inc. (NYSE:LYV), with a stake worth $401.9 million reported as of the end of December. Trailing Akre Capital Management was Select Equity Group, which amassed a stake valued at $378.9 million. Melvin Capital Management, Coatue Management, and D1 Capital Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. 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 8.71% of its 13F portfolio. Columbus Point is also relatively very bullish on the stock, earmarking 6.56 percent of its 13F equity portfolio to LYV.
Seeing as Live Nation Entertainment, Inc. (NYSE:LYV) has experienced falling interest from hedge fund managers, we can see that there was a specific group of fund managers who sold off their positions entirely heading into Q1. Interestingly, Robert Boucai’s Newbrook Capital Advisors sold off the largest position of all the hedgies monitored by Insider Monkey, worth close to $43.7 million in stock, and Brandon Haley’s Holocene Advisors was right behind this move, as the fund said goodbye to about $39.4 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 4 funds heading into Q1.
Let’s go over hedge fund activity in other stocks similar to Live Nation Entertainment, Inc. (NYSE:LYV). These stocks are The AES Corporation (NYSE:AES), KB Financial Group, Inc. (NYSE:KB), Lyft, Inc. (NASDAQ:LYFT), MGM Resorts International (NYSE:MGM), Darden Restaurants, Inc. (NYSE:DRI), Regions Financial Corporation (NYSE:RF), and Essex Property Trust Inc (NYSE:ESS). This group of stocks’ market valuations are closest to LYV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AES | 38 | 900730 | 6 |
| KB | 5 | 42629 | -1 |
| LYFT | 52 | 1166503 | 20 |
| MGM | 44 | 2171039 | 3 |
| DRI | 42 | 1410846 | 1 |
| RF | 26 | 203027 | 3 |
| ESS | 25 | 309571 | -3 |
| Average | 33.1 | 886335 | 4.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.1 hedge funds with bullish positions and the average amount invested in these stocks was $886 million. That figure was $1630 million in LYV’s case. Lyft, Inc. (NASDAQ:LYFT) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 5 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 72.2. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and beat the market again by 1.6 percentage points. Unfortunately LYV wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on LYV were disappointed as the stock returned 11.4% since the end of December (through 4/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
