2. ViaSat, Inc. (NASDAQ:VSAT)
Seth Klarman’s Stake Value: $672 million
Communications solutions company ViaSat, Inc. (NASDAQ:VSAT) ranks 2nd in our list of the best high growth stocks to buy according to Seth Klarman. Earlier in August the company posted Q1 results. Revenue of ViaSat, Inc. (NASDAQ:VSAT) in the quarter totaled $779.8 million, which was a 35.6% year over year growth.
As of the end of the second quarter of 2023, 13 hedge funds tracked by Insider Monkey had stakes in ViaSat, Inc. (NASDAQ:VSAT). The biggest stakeholder of ViaSat, Inc. (NASDAQ:VSAT) was Bob Peck and Andy Raab’s FPR Partners which owns a $182.5 million stake in the company.
Cove Street Capital made the following comment about Viasat, Inc. (NASDAQ:VSAT) in its second quarter 2023 investor letter:
“You, the reader, might find it hard to believe that we are this far into the letter before having any mention of Viasat, Inc. (NASDAQ:VSAT). It is satisfying to see “alphaesque” work finally see the light of day or the darkness of space depending upon your angle, but we aren’t to the promised land yet. We believe the market is just waking up to what VSAT has been working towards. As a quick recap, VSAT has been one of our largest positions for a number of years and unfortunately became our largest long Covid exposure stock which we did not realize at the time. The bearish premise on Viasat has largely been that they are throwing up billions of dollars in the wrong geosynchronous orbit and returns will be eaten by Starlink and other low Earth orbit (LEO) entrants. That’s hard to disprove when the damn satellite isn’t in the air. Well after much delay and a few breathless moments at T-minus, Viasat launched the first of its three VST3 constellation satellites. Yours truly spent 3 days at Cape Canaveral with management and other interested parties in weather delayed futility. The launch finally happened the day after I returned home. We believe that launching and preparing the satellite for operation will begin a massive change: bringing hundreds of millions of dollars of non-earning assets online and turning on the cashflow stream that the company has said was coming all this time. And if that isn’t exciting enough, during the quarter, VSAT closed on its acquisition of Inmarsat, which may prove to be a master stroke….stay tuned. Why events like this cluster together is hard to know.
Amid the tens of billions that have been burnt in space investing in the last 3 years and the mystery of Starlink math and Amazon’s Kuiper existence, Viasat in our opinion is one of only a handful of investable assets in the sector. Being up more than 25% this year is barely getting started if one does some conservative math. And we are actively attempting not to succumb to the “been down so long it looks like up to me” refrain which is irrelevant to the actual value at hand. And it’s a good example of “sell or not” discipline which people ask us about when things are not going well. Uncertainty on many fronts is receding, a state much prized by an investment world that has problems seeing beyond 3 months, and we see material gains from current levels.”
