Live Nation (LYV): Has the potential to be much higher in the months ahead

By Timothy Lutts, Chiel Investment Strategist and Editor of Cabot Stock of the Month Report

From Cabot Wealth Advisory 4/26/10 Sign up for free Cabot Wealth Advisory e-newsletter

The bull market is nearly 14 months old. That’s not ancient, but it is mature. And until the April high, it was characterized by an extremely cohesive, broad-based bull market. That’s good. It means the bull market is NOT over.

But now the market has begun a correction phase, aided by an earnings season that is bringing good news to some shareholders and less good news to others. As a result, many stocks are still soaring to new highs … but others are falling out of their bullish patterns.

So far, this is an absolutely normal consolidation, and if it continues true to form, the voices of discontent (by both losing shareholders and critical media) will grow louder and louder … and the number of stocks at new highs will grow smaller and smaller.

Many investors will throw in the towel.

But just when the feelings of disenchantment have grown greatest—ideally in concert with the appearance of notable bad news—the market will come back to life. And it’s at that time that investors in leading stocks, who haven’t fallen prey to the worries of the masses, will make a lot of money quickly.

One of the stocks that might deliver the goods is Live Nation (LYV), which is trading at a very affordable 16 today but has the potential to be much higher in the months ahead as its very capable management works to integrate its really big acquisition.

The stock earned a spot in Cabot Top Ten Report two weeks ago, and here’s what editor Mike Cintolo wrote.

“Live Nation was spun off from Clear Channel Communications in 2005 and today it’s the world’s largest seller of tickets to live events, mainly concerts for popular music. Last year, when half its business came from North American music sales, the company sold 140 million tickets, promoted 21,000 concerts and partnered with 850 sponsors. But this year, it will do far better because it’s merged with Ticketmaster! … Live Nation will be an even more powerful and profitable force in the industry. Note, the business is highly seasonal, quieter in the winter and super-busy in the summer, but the long-term trend is positive. In fact, Live Nation has grown revenues every year since 2002. “

When that appeared, the stock was trading at 16, and we recommended that subscribers try to buy between 14 and 15.5. Well, the stock did pull back calmly to 15, but it climbed right back up at 16, and today it broke out to new highs.

If you’d like Mike’s latest opinion on LVY, as well as immediate access to future recommendations of Cabot Top Ten Report, I suggest you take a look here: Cabot Top Ten Report.

Tim LuttsTimothy Lutts

President, Chief Investment Strategist, Editor of Cabot Stock of the Month

Timothy Lutts heads one of America’s most respected independent investment advisory services, publishing eight newsletters to more than 165,000 subscribers around the world. Tim leads a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems. Under his leadership, Cabot has been honored numerous times by both Timer Digest and the Hulbert Financial Digest as among the top investment newsletters in the industry. Tim also edits Cabot Stock of the Month.