Is Live Nation Entertainment, Inc. (LYV) A Good Stock To Buy?

Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30, 2015. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about Live Nation Entertainment, Inc. (NYSE:LYV).

Is Live Nation Entertainment, Inc. (NYSE:LYV) the right investment to pursue these days? Money managers are reducing their bets on the stock. The number of bullish hedge fund bets was cut by 8 recently. LYV was in 28 hedge funds’ portfolios at the end of the third quarter of 2015. There were 36 hedge funds in our database with LYV holdings at the end of the previous quarter. At the end of this article we will also compare LYV to other stocks including Silver Wheaton Corp. (USA) (NYSE:SLW), ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS), and StanCorp Financial Group, Inc. (NYSE:SFG) to get a better sense of its popularity.

To most market participants, hedge funds are perceived as underperforming, outdated investment vehicles of the past. While there are greater than 8000 funds with their doors open today, Our experts look at the bigwigs of this club, around 700 funds. It is estimated that this group of investors orchestrate the majority of the smart money’s total capital, and by keeping an eye on their matchless stock picks, Insider Monkey has found numerous investment strategies that have historically defeated Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, we’re going to take a look at the recent action regarding Live Nation Entertainment, Inc. (NYSE:LYV).

What does the smart money think about Live Nation Entertainment, Inc. (NYSE:LYV)?

At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Akre Capital Management, managed by Charles Akre, holds the largest position in Live Nation Entertainment, Inc. (NYSE:LYV). Akre Capital Management has a $150.5 million position in the stock, comprising 3.5% of its 13F portfolio. On Akre Capital Management’s heels is Horizon Asset Management, led by Murray Stahl, which holds an $59.6 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism include Christopher Lord’s Criterion Capital, William Crowley, William Harker, and Stephen Blass’s Ashe Capital and Thomas E. Claugus’s GMT Capital.

Judging by the fact that Live Nation Entertainment, Inc. (NYSE:LYV) has experienced a declination in interest from the aggregate hedge fund industry, logic holds that there exists a select few money managers who were dropping their full holdings heading into Q4. At the top of the heap, Jeff Lignelli’s Incline Global Management dropped the largest position of the 700 funds tracked by Insider Monkey, totaling close to $11.4 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dumped about $8.4 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 8 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to Live Nation Entertainment, Inc. (NYSE:LYV). These stocks are Silver Wheaton Corp. (USA) (NYSE:SLW), ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS), StanCorp Financial Group, Inc. (NYSE:SFG), and Seattle Genetics, Inc. (NASDAQ:SGEN). This group of stocks’ market values are similar to LYV’s market value.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $707 million, compared to $577 million in LYV’s case. StanCorp Financial Group, Inc. (NYSE:SFG) is the most popular stock in this table with 23 long positions, while Silver Wheaton Corp. (USA) (NYSE:SLW) is the least popular one. Compared to these stocks Live Nation Entertainment, Inc. (NYSE:LYV) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.