Bear of the Day: Madison Square Garden Company (MSGS)

It’s one of the most famous sports and entertainment venues in the world. Known colloquially as simply “The Garden” and situated right in the middle of Manhattan, Madison Square Garden is the oldest stadium in both the NBA and the NHL and has also hosted countless music, arts and comedy events over the past 52 years. For athletes and performers, “playing at the Garden” is synonymous with having reached the top of their field. It’s truly iconic.

The Madison Square Garden Company (MSGS) doesn’t own the building – the property itself belongs to a related company.*

MSGS owns the NBA’s New York Knicks and the NHL’s New York Rangers – two teams who play in the building and have enjoyed a huge local market and loyal fans around the country who buy up licensed merchandise and watch televised broadcasts. They also own several minor league franchises in both sports, training centers and even an esports team.

*(For clarification: Madison Square Garden Entertainment (MSGE) owns not only that notable, hulking physical facility that looms over two city blocks between 7th and 8th avenue in the low 30s; it also owns Radio City Music Hall and the Beacon Theater in Manhattan, the Chicago Theater, The Forum in Inglewood, CA and Boston’s Wang Theater. All those venues are currently closed. MSGE is currently a Zacks Rank #4 [Sell].)

Live sporting events are a very tough business to be in right now. The NHL cancelled the remainder of the regular season at the beginning of the outbreak in the US in March and pulled together a modified playoff format so that they could still award the Stanley Cup – which was eventually won by the Tampa Bay Lightning. Most teams had played roughly 70 out of a planned 82-game regular season schedule.

It was a similar story in the NBA with the regular season cancelled and an elimination tournament held in an isolation “bubble” in Florida in which all players, coaches, staff and referees have been avoiding all contact with the outside world throughout the proceedings. (The Los Angeles Lakers will look to take the championship trophy home tonight when they take the court up 3 games to 1 against the Miami Heat.)

While sports franchises were able to salvage at least some broadcast revenue from the truncated seasons, it’s a far cry from what they’re accustomed to pulling in from a diverse set of revenue sources during a normal season.

The real concern is next season: 2020-2021.

It’s anyone’s guess when we’ll be gathering once again in public spaces. Under normal circumstances, the new seasons for professional basketball and hockey should be underway soon, but obviously that’s not going to happen. Even if the leagues are able to cobble together something, there will be a massive revenue hit for individual teams.

For MSGS – which has never made all that much in net profits – that’s a disaster. Over the past 60 days, the Zacks Consensus Earnings Estimate has fallen from a net

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Is Madison Square Garden Sports Corp. (MSGS) A Good Stock To Buy?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Madison Square Garden Sports Corp. (NYSE:MSGS) and determine whether the smart money was really smart about this stock.

Is Madison Square Garden Sports Corp. (NYSE:MSGS) the right investment to pursue these days? Investors who are in the know were in a bullish mood. The number of long hedge fund bets moved up by 2 recently. Madison Square Garden Sports Corp. (NYSE:MSGS) was in 43 hedge funds’ portfolios at the end of June. The all time high for this statistics is 52. Our calculations also showed that MSGS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most stock holders, hedge funds are assumed to be unimportant, outdated investment tools of the past. While there are greater than 8000 funds trading today, We choose to focus on the upper echelon of this group, approximately 850 funds. These investment experts watch over most of all hedge funds’ total asset base, and by keeping track of their best picks, Insider Monkey has uncovered a number of investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Clifton Robbins Blue Harbour

Clifton S. Robbins of Blue Harbour Group

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla

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