Is Index Investing Turning Into A Bubble? This Billion Dollar Hedge Fund Thinks So (And Has The Data To Prove It)

 DISH Network Corp (NASDAQ:DISH)

– Shares Held By Horizon Kinetics (as of September 30): 1.41 Million

– Value of Holding (as of September 30): $77.56 Million

Horizon Kinetics reduced its stake in DISH Network Corp (NASDAQ:DISH) by 5% during the third quarter. However, the firm remains optimistic about the company’s future prospects. The reason for its optimism does not come from DISH Network Corp (NASDAQ:DISH)’s primary business of providing satellite television, but rather its wireless spectrum.

In its market commentary, Horizon Kinetics argues that if one solely considers Dish Network’s primary business and takes into account that it lost 1.9% of its subscribers last year, the stock of the company trading at a forward P/E of 22.62 currently might look overvalued. But that’s not an accurate picture. The company has bought wireless spectrum licenses worth $15 billion since 2007, which are dormant as of now but could be hugely profitable in the future. Moreover, the firm estimates the present market value of those spectrum licenses (minus the debt of the company) to be around $45 billion, which is significantly higher than the company’s current market capitalization of $29.22 billion. On January 23, analysts at Morgan Stanley upgraded the stock to ‘Overweight’ from ‘Equal Weight’, while keeping their price target on it unchanged at $75.

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