Sporting Gains at the Garden

04/20/2017 2:50 am EST


Michael Cintolo

Vice President of Investments and Chief Analyst, Cabot Heritage Corporation

The Madison Square Garden Company (MSG) is in the live sports and entertainment business, including events  live events at The Garden, the Theater at Madison Square Garden and The Forum, states Mike Cintolo, editor of Cabot Top Ten Trader.

The MSG Sports segment owns the New York Knicks NBA basketball team, the New York Rangers NHL hockey team and the New York Liberty WNBA women’s basketball team, among others

There is risk here, as the performance of its sports teams (whether they make the playoffs or not) is uncertain. The company usually loses money in the first three quarters of the year, then makes a bunch in the 4th quarter as the Radio City Music Hall Rockettes bring in huge crowds. 

Some analysts also worry that control of the company by the Dolan family might raise governance issues. But right now, with an expanding portfolio of entertainment holdings (and a projected return to profitability in 2018), the company is making an attractive case to investors. 

MSG has been around for a while, but its price history only goes back to September 2015, when the company, which was spun off from AMC Networks (AMCX) in 2010, split off from its media unit.

The stock recently soared from $175 to $202 in just nine trading days. A few weeks of consolidationled to a rally above $200, which the stock has maintained. MSG looks buyable on a pullback of a few points.

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