Were Hedge Funds Right About Live Nation Entertainment, Inc. (LYV)?

Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Live Nation Entertainment, Inc. (NYSE:LYV) at the end of the third quarter and determine whether the smart money was really smart about this stock.

Live Nation Entertainment, Inc. (NYSE:LYV) was in 47 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 50. LYV investors should be aware of an increase in enthusiasm from smart money recently. There were 40 hedge funds in our database with LYV holdings at the end of June. Our calculations also showed that LYV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to take a look at the latest hedge fund action encompassing Live Nation Entertainment, Inc. (NYSE:LYV).

Stanley Druckenmiller of Duquesne Capital

Do Hedge Funds Think LYV Is A Good Stock To Buy Now?

At third quarter’s end, a total of 47 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from one quarter earlier. By comparison, 50 hedge funds held shares or bullish call options in LYV a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Melvin Capital Management, managed by Gabriel Plotkin, holds the most valuable position in Live Nation Entertainment, Inc. (NYSE:LYV). Melvin Capital Management has a $544.5 million position in the stock, comprising 2.8% of its 13F portfolio. Coming in second is Gabriel Plotkin of Melvin Capital Management, with a $510.3 million call position; 2.6% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Robert Joseph Caruso’s Select Equity Group, and Murray Stahl’s Horizon Asset Management. 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 7.57% of its 13F portfolio. Sabrepoint Capital is also relatively very bullish on the stock, designating 3.93 percent of its 13F equity portfolio to LYV.

As one would reasonably expect, key money managers were breaking ground themselves. Duquesne Capital, managed by Stanley Druckenmiller, created the largest position in Live Nation Entertainment, Inc. (NYSE:LYV). Duquesne Capital had $39 million invested in the company at the end of the quarter. Leon Shaulov’s Maplelane Capital also initiated a $30.1 million position during the quarter. The other funds with brand new LYV positions are Jonathan Soros’s JS Capital, Leon Shaulov’s Maplelane Capital, and Joseph Samuels’s Islet Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Live Nation Entertainment, Inc. (NYSE:LYV) but similarly valued. We will take a look at Ingersoll Rand Inc. (NYSE:IR), Steris Plc (NYSE:STE), The Cooper Companies, Inc. (NYSE:COO), Regions Financial Corporation (NYSE:RF), The Clorox Company (NYSE:CLX), Cenovus Energy Inc (NYSE:CVE), and Church & Dwight Co., Inc. (NYSE:CHD). This group of stocks’ market values are closest to LYV’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.9 hedge funds with bullish positions and the average amount invested in these stocks was $1018 million. That figure was $1308 million in LYV’s case. The Cooper Companies, Inc. (NYSE:COO) is the most popular stock in this table. On the other hand Church & Dwight Co., Inc. (NYSE:CHD) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Live Nation Entertainment, Inc. (NYSE:LYV) is more popular among hedge funds. Our overall hedge fund sentiment score for LYV is 88.2. 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. 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 returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on LYV as the stock returned 20.2% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.