Live Nation (LYV) Achieved an Unanticipated Intrinsic Value Growth, Says Oakmark Funds

Oakmark Funds, a long-term value investment management firm, published its “Oakmark Global Fund” fourth quarter 2020 investor letter – a copy of which can be seen here. A return of 29.45% was recorded by the fund in the fourth quarter of 2020, outperforming both its MSCI World benchmark that had a 14.0% gain, and its Lipper Global Fund Index that delivered a 16.2% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Oakmark Global Fund, in their Q4 2020 investor letter, mentioned Live Nation Entertainment, Inc. (NYSE: LYV) and emphasized their views on the company. Live Nation Entertainment, Inc. is a Beverly Hills, California-based entertainment company that currently has an $18.3 billion market capitalization. Since the beginning of the year, LYV delivered a 14.37% return, extending its 12-month gains to 78.24%. As of March 26, 2021, the stock closed at $84.04 per share.

Here is what Oakmark Global Fund has to say about Live Nation Entertainment, Inc. in their Q4 2020 investor letter:

“In 2006, we initiated our position in Live Nation, the global entertainment company that handles promotion, venue management and ticket sales for live events. Live Nation was spun out of the former Clear Channel Communications in late 2005. In our view, spinoffs often represent attractive opportunities because investors frequently undervalue the new company. We believed this was the case with Live Nation, especially given its initially small market capitalization. As well, when spinoffs are freed from their parents, they typically benefit from intensified management focus and more flexible capital allocation policies. In Live Nation’s case, the spinoff helped make possible the merger with Ticketmaster in 2010, which materially improved the business franchise. Although these factors alone might have made Live Nation a good holding for the Fund, an unexpected technology helped to boost the company’s fortunes: streaming. As the advantages of streaming convinced consumers to reduce or even eliminate their purchases of media, such as CDs and DVDs, artists began to tour more, thereby providing a tailwind to Live Nation’s operations. This accelerated growth in the company’s intrinsic value per share, which in turn generated numerous increases in our sell target for the holding, enabling us to continue to own the shares in the Fund for 14 years. We typically target a three- to five-year holding period for our equity investments, but we love opportunities like Live Nation, which achieve unanticipated intrinsic value growth.”


Our calculations show that Live Nation Entertainment, Inc. (NYSE: LYV) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Live Nation Entertainment, Inc. was in 46 hedge fund portfolios, compared to 50 funds in the third quarter. LYV delivered a 17.31% return in the past 3 months.