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

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is ViaSat, Inc. (NASDAQ:VSAT), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

ViaSat, Inc. (NASDAQ:VSAT) investors should pay attention to a decrease in support from the world’s most elite money managers lately. ViaSat, Inc. (NASDAQ:VSAT) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistic is 30. Our calculations also showed that VSAT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Jeffrey Bronchick of Cove Street Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s take a glance at the latest hedge fund action surrounding ViaSat, Inc. (NASDAQ:VSAT).

Do Hedge Funds Think VSAT Is A Good Stock To Buy Now?

At second quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in VSAT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in ViaSat, Inc. (NASDAQ:VSAT) was held by Baupost Group, which reported holding $811.8 million worth of stock at the end of June. It was followed by FPR Partners with a $291.2 million position. Other investors bullish on the company included Cove Street Capital, Millennium Management, and Freshford Capital Management. In terms of the portfolio weights assigned to each position FPR Partners allocated the biggest weight to ViaSat, Inc. (NASDAQ:VSAT), around 7.51% of its 13F portfolio. Cove Street Capital is also relatively very bullish on the stock, designating 7.44 percent of its 13F equity portfolio to VSAT.

Judging by the fact that ViaSat, Inc. (NASDAQ:VSAT) has witnessed a decline in interest from hedge fund managers, it’s easy to see that there were a few funds that elected to cut their entire stakes last quarter. It’s worth mentioning that Sander Gerber’s Hudson Bay Capital Management sold off the largest stake of all the hedgies tracked by Insider Monkey, totaling close to $2.1 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also sold off its stock, about $0.9 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 4 funds last quarter.

Let’s now review hedge fund activity in other stocks similar to ViaSat, Inc. (NASDAQ:VSAT). These stocks are Riot Blockchain, Inc (NASDAQ:RIOT), Poshmark, Inc. (NASDAQ:POSH), CommVault Systems, Inc. (NASDAQ:CVLT), GoHealth, Inc. (NASDAQ:GOCO), Mercury General Corporation (NYSE:MCY), Genius Sports Ltd (NYSE:GENI), and Murphy Oil Corporation (NYSE:MUR). All of these stocks’ market caps are similar to VSAT’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $290 million. That figure was $1261 million in VSAT’s case. Genius Sports Ltd (NYSE:GENI) is the most popular stock in this table. On the other hand GoHealth, Inc. (NASDAQ:GOCO) is the least popular one with only 14 bullish hedge fund positions. ViaSat, Inc. (NASDAQ:VSAT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VSAT is 39. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on VSAT as the stock returned 13.1% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.