What Makes Endeavor Group Holdings (EDR) a Prospective Investment Option?
Merion Road Capital, an investment advisor, released its second-quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, Merion Road Small Cap Fund returned 5.2% compared to a 5.3% return for the Russell 2000 Index and 2.1% for the Barclay Hedge Fund Index. Furthermore, MRCM Long Only Large Cap returned 13.4% compared to an 8.7% return for the S&P 500 Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Merion Road Capital highlighted stocks like Endeavor Group Holdings, Inc. (NYSE:EDR) in the second quarter 2023 investor letter. Headquartered in Beverly Hills, California, Endeavor Group Holdings, Inc. (NYSE:EDR) is an entertainment, sports, and content company. On July 18, 2023, Endeavor Group Holdings, Inc. (NYSE:EDR) stock closed at $23.20 per share. One-month return of Endeavor Group Holdings, Inc. (NYSE:EDR) was 4.32%, and its shares gained 2.93% of their value over the last 52 weeks. Endeavor Group Holdings, Inc. (NYSE:EDR) has a market capitalization of $6.959 billion.
Merion Road Capital made the following comment about Endeavor Group Holdings, Inc. (NYSE:EDR) in its second quarter 2023 investor letter:
"One new addition to the book has been Endeavor Group Holdings, Inc. (NYSE:EDR). EDR is a conglomerate of various entertainment assets led by legendary executive Ari Emanuel. Its properties include owned sports (primarily the UFC), events, and talent representation. Earlier this year EDR announced that it would merge the UFC with the WWE to form a new publicly traded company called TKO Group Holdings (“TKO”). From a business perspective this makes a ton of sense as EDR will assume management and control the vote with 51%. While Vince McMahan has created tremendous value at WWE, he has always been a polarizing figure and more recently has faced sexual misconduct allegations. With WWE television rights deals coming due next year it makes sense to bring a proven industry leader like Emanuel to the helm. Furthermore, EDR should have strong negotiating power by combining the WWE with the UFC, an increasing popular and mainstream sport.
Given that WWE is currently a publicly traded company, we already have a public mark on TKO. At 16x EBITDA TKO seems to be fairly priced, perhaps at a small discount. If you believe that the value of live sports will continue to grow, which I do, then this should be a nice investment over time. It still seems like early innings for UFC growth and there is the potential for EDR to improve monetization at WWE. For instance, Emanuel is on record saying that the rate card for SmackDown is 30% cheaper than the rest of the Friday night lineup…” (Click here to read the full text)
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Endeavor Group Holdings, Inc. (NYSE:EDR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Endeavor Group Holdings, Inc. (NYSE:EDR) at the end of first quarter which was 42 in the previous quarter.
We discussed Endeavor Group Holdings, Inc. (NYSE:EDR) in another article and shared the list of stocks Cathie Wood selling in 2023. In addition, please check out our hedge fund investor letters Q2 2023 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.
