Live Nation also bombed when it came to cash flow. While net cash from operating activities saw an increase, free cash flow was negative. In fact, the company posted negative free cash flow of roughly $52 million, which was about the same amount as the previous year's similar quarter.

As I observed in a piece on Live Nation's fourth-quarter results, major artists are finding it to be in their best interest to sign up with the company since the music-download industry, as represented by such websites as Amazon (NASDAQ: AMZN), Yahoo! (NASDAQ: YHOO), and Apple's (NASDAQ: AAPL) iTunes, have completely disrupted the old, higher-margin physical media model. Plus, consumers oftentimes don't care about purchasing full albums. They'll just take the songs they like from various artists and create their own mix formats. This has made things difficult for musicians, and has made a successful live concert tour that much more important.

Live Nation is great at what it does in terms of promotion. But the business needs to make some money! If you read through the release, you'll note a very confident tone on the part of management. The company highlighted the double-digit increase in deferred revenue. And it firmly believes that cash flows will improve in the near future.

Okay, maybe they will. But do I have to buy on that sentiment alone? Nope. Now, admittedly, the stock has risen while I've been bearish on it. Then again, a lot of stocks have risen lately. Even ones that look like Live Nation.

I wouldn't feel comfortable adding this low-priced equity to my portfolio. I'm still in the I'll-pass category. I can think of other investments I'd make first before this one. Even though a lot of stocks are acting as if every bit of bad news is priced in, I'll look for ones that have better fundamentals. Maybe I'll check in on Live Nation again if the proposed Ticketmaster (NASDAQ: TKTM) merger goes through. For now, I'll remain on the sidelines.

Disclosure: I don't own any company mentioned; positions can change without notice.