How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Live Nation Entertainment, Inc. (NYSE:LYV) and determine whether hedge funds had an edge regarding this stock.

Live Nation Entertainment, Inc. (NYSE:LYV) shareholders have witnessed a decrease in hedge fund interest recently. Live Nation Entertainment, Inc. (NYSE:LYV) was in 44 hedge funds’ portfolios at the end of June. The all time high for this statistics is 46. Our calculations also showed that LYV 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 today’s marketplace there are a large number of indicators stock traders employ to evaluate publicly traded companies. Some of the less known indicators are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can outpace the market by a solid amount (see the details here).

Ricky Sandler of Eminence Capital

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. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. 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. Keeping this in mind we’re going to take a peek at the recent hedge fund action encompassing Live Nation Entertainment, Inc. (NYSE:LYV).

How have hedgies been trading Live Nation Entertainment, Inc. (NYSE:LYV)?

Heading into the third quarter of 2020, a total of 44 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. By comparison, 39 hedge funds held shares or bullish call options in LYV a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

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When looking at the institutional investors followed by Insider Monkey, D1 Capital Partners, managed by Daniel Sundheim, holds the most valuable position in Live Nation Entertainment, Inc. (NYSE:LYV). D1 Capital Partners has a $250.9 million position in the stock, comprising 1.9% of its 13F portfolio. The second largest stake is held by Akre Capital Management, led by Charles Akre, holding a $247.7 million position; 1.9% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish include Robert Joseph Caruso’s Select Equity Group, Jeffrey Tannenbaum’s Fir Tree and Philippe Laffont’s Coatue Management. In terms of the portfolio weights assigned to each position Fir Tree allocated the biggest weight to Live Nation Entertainment, Inc. (NYSE:LYV), around 6.07% of its 13F portfolio. Emerson Point Capital is also relatively very bullish on the stock, dishing out 4.94 percent of its 13F equity portfolio to LYV.

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