Here is one for the (far future) watchlist, but not sure it is ready for prime time yet.
Live concerts are becoming a very big business, and Live Nation is in the heart of that growth. Even with the age demographic of this board, I would say we have all heard of at leat one of these: Bonnaroo, Lollapalooz and Austin City limits. I think we have all heard the generalization that Millennials are all about “experiences” over things, well these are some of the experiences they spend their money on.
Live Nation dominates festival promotion and management, oh, and it bought ticketmaster. But they don’t force you to go to a ticketmaster page to buy a ticket, you can use an app, buy directly from an mobile add or even from a Facebook page. They just inked a new deal with Google’s YouTube to allow purchse of tickets under YouTube videos of touring artists. No, they don’t just do big festivals, they do a ton of “regular” concerts. Don’t forget, artists don’t make much money of record deals or Pandora, and more and more they realize the big money comes from tours (something the Grateful Dead figured out quickly).
This year they are offering 1000 “festival passes” for $800 each. They get you into any festival sponsored by Live Nation. This compares to $250 for a single large event like Bonnaroo. Yes, people pay that gladly.
They also manage 350 artists, including U2, Nicki Minaj and Lady Gaga and they operate in over 40 countries.
The article points out that there isn’t much room to grow in the US, but Asia and Latin America offer expansion opportunities. “Major players in Latin America are ripe takeover targets”.
Their scale and vertical integration between different business segments, as well as massive global scale has made them nearly untouchable to rivals… The article points out the failed “Fyre Fest” in the Bahamas that was billed as “Coachella in the Bahamas”. This event was not managed by Live Nation and was a disaster with people paying thousands of dollars only to end up staying in humanitarian aid tents.
They are being sued (bogus) for sponsoring the concert in Las Vegas where that idiot shot everyone, which says something about our sad legal sysetm.
Quick, before you read farther, whay do you think their revenue is…
3Q numbers released on Nov 2 showed a 12% revenue increase to $3.56 Billion, that’s a lot of tickets. But EPS was only up 8.2% (not worth of this board yet).
Current IBD ratings are fairly weak.
Checklist…Rating
Composite Rating 73 Fail
EPS Rating 59 Fail
RS Rating 92 Pass
Group RS Rating C+ Neutral
SMR Rating D Fail
Acc/Dis Rating B- Pass
They only have 1 year of consecutive sales growth (=poor)
3 year sales growth rate is a paltry 12%, also poor.
Debt to equity is 201%.
So I have brought you a stock and told you it is not good enough. At least you won’t get excited about it independently and go spend time researching it 