+0.07%
-0.06%Today I sold half of AMC Networks (AMCX). Several months ago I wrote a positive column on AMCX but unfortunately I can’t find the link. The stock is up strongly today with a lot cable network stocks. When it was trading in the low $30s, I thought it could reach $40-42. It is there so I sold half. Primetime ratings at AMC Network have been good and Mad Men returns in March. Those catalysts and what I anticipate will be a strong quarter are the reasons I am holding half the position. However, the position size is about my low end of 1%. Typically, I think in terms of position sizes of 1%, 2%, 3%, 4%, %, 8%, 10%.
I also took profits today in Live Nation Ticketmaster (LYV). I sold one-third of the position at $10.67. On the reminder of the position I sold in-the-money April $10 calls for $1.40. The calls give me protection down to $9.25 while leaving upside to $11.40. I am worried LYV’s upcoming 4Q report could put a damper on the 25% rally in the shares since mid-December. However, I like the vote of confidence from John Malone’s Liberty Media (LMCA), which is a major shareholder and has indicated it could buy more LYV or participate in a deal to take LYV private. Today’s LYV strength is a little surprising given news that Mark Cuban is partnering with AEG and Ryan Seacrest to rebrand HD Net into a live entertainment cable channel built around AEG’s ticketing and concert venue businesses.
I would be very interested in buying back positions sold today in both LYV and AMCX on a meaningful pullback.
Disclosure: AMCX and LYV are net long positions in the Entermedia Funds. Steve Birenberg is co-portfolio manager of Entermedia, owns a stake in the Funds’ investment management company, and has personal monies invested in the Entermedia Funds.
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