The Liberty SiriusXM Group (LSXMA) Declined in 2022 Despite Strong Business Performance

·3 min read

Ruane, Cunniff & Goldfarb, an investment adviser managing Sequoia Fund, released its Q4 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 8.81% compared to a 7.56% return for the S&P 500 Index. The fund returned -30.52% in 2022 compared to -18.11% for the index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Sequoia Fund highlighted stocks like The Liberty SiriusXM Group (NASDAQ:LSXMA) in its Q4 2022 investor letter. Headquartered in Englewood, Colorado, The Liberty SiriusXM Group (NASDAQ:LSXMA) is an entertainment company. On March 21, 2023, The Liberty SiriusXM Group (NASDAQ:LSXMA) stock closed at $27.46 per share. One-month return of The Liberty SiriusXM Group (NASDAQ:LSXMA) was -17.71%, and its shares lost 40.25% of their value over the last 52 weeks. The Liberty SiriusXM Group (NASDAQ:LSXMA) has a market capitalization of $9.111 billion.

Sequoia Fund made the following comment about The Liberty SiriusXM Group (NASDAQ:LSXMA) in its Q4 2022 investor letter:

"Shares of The Liberty SiriusXM Group (NASDAQ:LSXMA), the holding company through which we own the Formula One motorsport league, declined this year, though by significantly less than the S&P 500 Index. Business performance was superb. For full-year 2022, Liberty Media's revenues are expected to be up almost 20%, with profits up even more. This robust growth is the result of a continued recovery from pandemic-related disruptions, but even after adjusting for this recovery the business grew nicely. Versus 2019, Liberty Media's revenues and per share earnings power are expected to have compounded at annual rates of approximately 7% and 23%, respectively.

Formula One has made very significant progress since Sequoia first acquired shares via a private placement in 2017. Formula One has for decades been the pinnacle of global motorsport, but under previous management it suffered from internecine fissures and short-sighted strategy that were negatively impacting the sport and the business. 2022 saw the full implementation of a new Concorde Agreement signed in 2020. The Concorde Agreement lays out the key economic, technical and sporting terms on which the teams participate, and this most recent one realigns the teams and the league in a manner that should pay off for all parties involved. The new Concorde Agreement has already had some positive impact on the sport and the business, and we believe the majority of the benefits have yet to be realized.

Already, the sport is healthier than it has been for a long time. TV viewership was up globally again this year, which helped Formula One secure a round of richer broadcast deals in Europe as well as in the US, where the new deal with ESPN/ABC is rumored to be almost 10x more remunerative than the last one. In 2022, US TV viewership was up almost 30% over last year, building on the momentum of previous years and driven by the latest season of Netflix's Drive to Survive series and the calendar's new Miami race. Liberty Media plans to add a third US race in 2023, in Las Vegas. Instead of relying on a promoter as it typically does, Liberty Media will run the Las Vegas race itself, which will require significant investment but should generate an attractive return..." (Please click here to read the full text)

Photo by Ashley Byrd on Unsplash

The Liberty SiriusXM Group (NASDAQ:LSXMA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held The Liberty SiriusXM Group (NASDAQ:LSXMA) at the end of the fourth quarter which was 43 in the previous quarter.

We discussed The Liberty SiriusXM Group (NASDAQ:LSXMA) in another article and shared Weitz Partners III Opportunity Fund's views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.


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