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How to Trade on Lin-Sanity (Update 1)

Updated to reflect Maxim Group analyst comments on second page.

NEW YORK (TheStreet) -- Shares of Madison Square Garden (MSG) hit an all-time record in Monday trading, bolstered by the play of New York Knick phenom and Harvard grad Jeremy Lin.

For investors, the question is how they can tap the buzz of the "Lin-sanity" that's swept across the New York metro area and the basketball world. Increasingly, it looks like the Lin-based Knicks winning streak may come at the perfect time for Madison Square Garden, while providing a dent to Time Warner Cable (TWC) shares.

Jeremy Lin has led the New York Knicks to five straight victories.

Lin may make a big impact on MSG and Time Warner Cable shares, even if he doesn't turn out to the all-star caliber NBA'er he's proven to be in his first five Knicks starts. That's because the hype may helps the Knicks further boost season ticket prices after a 49% lift in 2011, while it also may give Madison Square Garden added leverage as it negotiates a multi-year sports programming distribution package with Time Warner Cable.

"Until this mini spurt, the Knicks were one of the only things holding [Madison Square Garden] back," says Martin Pyykkonen, an analyst with Wedge Partners. Madison Square Garden is currently deep in the process of a multiyear effort to improve the Garden, adding seat capacity, just as it raises ticket prices for the Knicks and the New York Rangers ice hockey team, which share the stadium known as "the world's most famous arena."

With the Rangers off to the second best start in the National Hockey League and added Knicks interest, season ticket, memorabilia and food sales at the Garden may be headed higher. "The bigger picture story is the underappreciated story to the stock and ticket prices," adds Pyykkonen.

In March 2011, the Knicks boosted knicks season ticket prices on the heels of hype surrounding the signing of superstar players that put the struggling team on track for the playoffs. The ticket price rise may continue this March if Lin can generate star-like fan interest. Meanwhile, after a 23% 2011 boost, the best play by the Rangers since their 1994 Stanley Cup winning season makes hockey ticket prices ripe for a 2012 lift.

Lin, who was cut by the Golden State Warriors and Houston Rockets before landing on the Knicks on Dec. 27, put up 28 points and 8 assists in his first NBA start against the Utah Jazz, numbers that hadn't been reached since Isaiah Thomas made a 1981 splash. As the first-year Knick has continued his stellar play, leading to a 5-game winning streak, Madison Square Garden shares have surged.

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