5 Value Arbitrage Stocks Sabrepoint Capital is Buying

1. Eventbrite, Inc. (NYSE:EB)

Topping our list of Sabrepoint Capital’s top value arbitrage buys is the fund’s top stock pick Eventbrite, Inc. (NYSE:EB), which it bought another 150,000 shares of during Q3. George Baxter’s firm now owns 1.4 million EB shares valued at $28.34 million at the end of September. While Sabrepoint continues to be bullish, other hedge funds grew cautious, as just two funds initiated new positions in EB during the September quarter, the lowest total since late-2018.

Sabrepoint Capital is clearly bullish on the live events market rebounding from its pandemic swoon, having bought into both Eventbrite, Inc. (NYSE:EB) and Live Nation during Q3 of 2020. By far the largest small-to-mid market event coordinator in the United States, hedge funds believe Eventbrite will benefit from an Australian-type rebound in the live events market and that the experience economy will continue to grow at close to double-digit rates in the years to come. Hedge funds are also hopeful that the cost cuts implemented by Eventbrite during the pandemic will persist going forward, making the company a much more profitable one.

Artisan Partners, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ second quarter 2021 investor letter and mentioned Eventbrite, Inc. (NYSE:EB). Here‘s what the fund said:

“Eventbrite is the largest software and ticketing platform helping event creators plan, promote and produce live events in small-and-mid markets. The company generates revenue by charging a per-ticket fee on paid tickets and has a strong foothold in the small-and-mid markets—nearly 20X the size of the next largest competitor. We believe Eventbrite is well-positioned to benefit from a sharp increase in demand for live events amid the broader re-opening of the US economy—a dynamic it has already witnessed in Australia with live events bouncing back to approximately 90% of 2019 levels. We expect this to be amplified by significant cost cuts made during the pandemic (>30% of 2019 revenue) remaining in place. Longer term, we believe Eventbrite should benefit from the secular trend toward consumer experiences, an industry growing over 8% per year prior to the pandemic.”

You can also take a peek at 10 Tech Stocks to Buy According to Select Equity Group and Top 10 Stock Picks of Thomas Bancroft’s Makaira Partners.

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