Is ViaSat, Inc. (VSAT) Going to Burn These Hedge Funds?

To many of your peers, hedge funds are seen as bloated, old financial vehicles of a period lost to current times. Although there are more than 8,000 hedge funds with their doors open today, Insider Monkey focuses on the masters of this club, about 525 funds. Analysts calculate that this group controls most of the smart money’s total assets, and by paying attention to their highest performing equity investments, we’ve formulated a number of investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as crucial, positive insider trading sentiment is another way to analyze the marketplace. Obviously, there are a variety of incentives for an executive to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).

Keeping this in mind, it’s important to examine the latest info surrounding ViaSat, Inc. (NASDAQ:VSAT).

Hedge fund activity in ViaSat, Inc. (NASDAQ:VSAT)

Heading into Q3, a total of 13 of the hedge funds we track were bullish in this stock, a change of 63% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes considerably.

When using filings from the hedgies we track, Baupost Group, managed by Seth Klarman, holds the biggest position in ViaSat, Inc. (NASDAQ:VSAT). Baupost Group has a $786.1 million position in the stock, comprising 19.5% of its 13F portfolio. The second largest stake is held by Bob Peck and Andy Raab of FPR Partners, with a $427.5 million position; 17.4% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Charles Clough’s Clough Capital Partners, Donald Chiboucis’s Columbus Circle Investors and D. E. Shaw’s D E Shaw.

Consequently, certain bigger names have been driving this bullishness. Baupost Group, managed by Seth Klarman, created the largest position in ViaSat, Inc. (NASDAQ:VSAT). Baupost Group had 786.1 million invested in the company at the end of the quarter. Bob Peck and Andy Raab’s FPR Partners also initiated a $427.5 million position during the quarter. The other funds with new positions in the stock are Charles Clough’s Clough Capital Partners, Donald Chiboucis’s Columbus Circle Investors, and D. E. Shaw’s D E Shaw.

What have insiders been doing with ViaSat, Inc. (NASDAQ:VSAT)?

Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the latest 180-day time period, ViaSat, Inc. (NASDAQ:VSAT) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to ViaSat, Inc. (NASDAQ:VSAT). These stocks are Alcatel Lucent SA (ADR) (NYSE:ALU), Ciena Corporation (NASDAQ:CIEN), Arris Group, Inc. (NASDAQ:ARRS), Acme Packet, Inc. (NASDAQ:APKT), and Exelis Inc (NYSE:XLS). All of these stocks are in the communication equipment industry and their market caps match VSAT’s market cap.

Using the returns shown by the previously mentioned research, average investors should always watch hedge fund and insider trading sentiment, and ViaSat, Inc. (NASDAQ:VSAT) applies perfectly to this mantra.

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