October 23, 2024

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Should You Consider Investing in Madison Square Garden Entertainment (MSGE)?

Should You Consider Investing in Madison Square Garden Entertainment (MSGE)?

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Baron Funds, an asset management firm, published its “Baron Real Estate Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. The Baron Real Estate Fund (the “Fund”) declined 10.76% (Institutional Shares) in the first quarter of 2022, modestly outperforming its primary benchmark, the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”), which declined 11.03%. The Fund underperformed the MSCI US REIT Index (the “REIT Index”), which declined 4.28%. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Real Estate Fund mentioned Madison Square Garden Entertainment Corp. (NYSE:MSGE) and explained its insights for the company. Founded in 2020, Madison Square Garden Entertainment Corp. (NYSE:MSGE) is a United States-based entertainment holding company with a $2.1 billion market capitalization. Madison Square Garden Entertainment Corp. (NYSE:MSGE) delivered a -8.63% return since the beginning of the year, while its 12-month returns are down by -30.50%. The stock closed at $64.27 per share on May 23, 2022.

Here is what Baron Real Estate Fund has to say about Madison Square Garden Entertainment Corp. (NYSE:MSGE) in its Q1 2022 investor letter:

“We recently acquired shares in Madison Square Garden Entertainment Corp. (“MSGE”) at what we believe was a highly discounted average price of only $68 per share. From its peak of $121 per share in March 2021, the stock declined more than 40% due to setbacks in indoor live entertainment amid the COVID-19 resurgence and real estate construction delays. The company owns iconic sports and entertainment real estate venues such as Madison Square Garden, the Chicago Theater, and is building a new state-of-the-art venue in Las Vegas, the MSG Sphere at The Venetian (slated to open in 2023). In addition, MSGE has long-term leases at Radio City Music Hall and the Beacon Theatre, while also maintaining a controlling stake in restaurant group TAO.

Our investment thesis in MSGE is based on the following:

Should You Consider Investing in Madison Square Garden Entertainment (MSGE)?

Our calculations show that Madison Square Garden Entertainment Corp. (NYSE:MSGE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Madison Square Garden Entertainment Corp. (NYSE:MSGE) was in 17 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 19 funds in the previous quarter. Madison Square Garden Entertainment Corp. (NYSE:MSGE) delivered a -18.65% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Madison Square Garden Entertainment Corp. (NYSE:MSGE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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

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