In this article, we discuss 5 best small cap tech stocks to buy. If you want to read our detailed discussion on the tech industry, head over to 12 Best Small Cap Tech Stocks To Buy.
5. EchoStar Corporation (NASDAQ:SATS)
Number of Hedge Fund Holders: 28
EchoStar Corporation (NASDAQ:SATS) offers networking technologies and services worldwide. The company operates through two segments – Hughes and EchoStar Satellite Services (ESS). The company provides broadband network technologies, managed services, satellite services, and communications solutions to government and enterprise customers. It also designs, installs, and offers equipment for other satellite systems. EchoStar Corporation (NASDAQ:SATS) is one of the best technology stocks to monitor. On May 9, the company reported Q1 GAAP earnings per share of $0.35 and a revenue of $439.6 million. Cash, cash equivalents, and current marketable investment securities stood at $1.7 billion at the end of Q1 2023.
According to Insider Monkey’s first quarter database, 28 hedge funds were bullish on EchoStar Corporation (NASDAQ:SATS), compared to 23 funds in the earlier quarter. Mark G. Schoeppner’s Quaker Capital Investments is the biggest stakeholder of the company, with 2 million shares worth over $37 million.
Steel City Capital made the following comment about EchoStar Corporation (NASDAQ:SATS) in its Q3 2022 investor letter:
“Virtually all of the Partnership’s year-to-date decline emanates from our long book. In aggregate, our short positions have partially offset this performance. Outsized declines have come from EchoStar Corporation (NASDAQ:SATS) and Anterix (ATEX). With SATS, I think we “bought well” in the sense that our position was established at an average price of $23.40 vs. the most recent price of $17.40. There certainly remains the risk we’ve invested in a “value-trap” / “melting-ice cube,” but I’ll try to explain why I think that outlook isn’t completely accurate.
I tend to think of SATS as an iceberg whose peak – the portion visible above water – reflects only a small part of its totality. The visible portion is the company’s legacy satellite broadband business that, at the current time, is shedding customers at an unhealthy clip. The main culprit is most likely Elon Musk’s Starlink, which currently offers more attractive speeds (100 Mbps) and lower latency. Maybe I’m being pollyannaish about the situation, but I believe when SATS brings its Jupiter 3 satellite online next year, and is capable of delivering the same speeds as Starlink, churn will not only slow, but subscriber counts should begin to rebound. SATS will never be competitive with respect to latency, but that doesn’t keep me up at night. That’s not to discount the draw of low latency, which is important for use cases such as video conferencing and gaming, but when your target customer base is scraping by with max speeds of just 25 Mbps, the prospect of 100 Mbps should be highly attractive. Moreover, as I’ve discussed in prior communications, the financial case for Starlink is unproven and it remains to be seen whether or not Musk can ever make the unit economics work…” (Click here to read the full text)
