Is ViaSat, Inc. (NASDAQ:VSAT) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is VSAT stock a buy? ViaSat, Inc. (NASDAQ:VSAT) was in 27 hedge funds’ portfolios at the end of December. The all time high for this statistic is 30. VSAT has seen a decrease in hedge fund interest recently. There were 30 hedge funds in our database with VSAT positions at the end of the third quarter. Our calculations also showed that VSAT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Donald Sussman of Paloma Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now let’s analyze the key hedge fund action encompassing ViaSat, Inc. (NASDAQ:VSAT).
Do Hedge Funds Think VSAT Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from one quarter earlier. By comparison, 26 hedge funds held shares or bullish call options in VSAT a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baupost Group held the most valuable stake in ViaSat, Inc. (NASDAQ:VSAT), which was worth $531.8 million at the end of the fourth quarter. On the second spot was FPR Partners which amassed $218.2 million worth of shares. Odey Asset Management Group, Cove Street Capital, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to ViaSat, Inc. (NASDAQ:VSAT), around 13.34% of its 13F portfolio. Mountain Lake Investment Management is also relatively very bullish on the stock, earmarking 6.45 percent of its 13F equity portfolio to VSAT.
Because ViaSat, Inc. (NASDAQ:VSAT) has witnessed bearish sentiment from the smart money, it’s easy to see that there were a few hedgies that decided to sell off their entire stakes last quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest position of all the hedgies monitored by Insider Monkey, worth about $4.8 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund dropped about $1.1 million worth. These transactions are important to note, as total hedge fund interest fell by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to ViaSat, Inc. (NASDAQ:VSAT). We will take a look at Rush Enterprises, Inc. (NASDAQ:RUSHA), Rush Enterprises, Inc. (NASDAQ:RUSHB), Essential Properties Realty Trust, Inc. (NYSE:EPRT), Axos Financial, Inc. (NYSE:AX), Xperi Holding Corporation (NASDAQ:XPER), Sangamo Therapeutics, Inc. (NASDAQ:SGMO), and PROS Holdings, Inc. (NYSE:PRO). This group of stocks’ market caps resemble VSAT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUSHA | 17 | 83229 | 0 |
| RUSHB | 3 | 48467 | 1 |
| EPRT | 7 | 40610 | -5 |
| AX | 13 | 45761 | -2 |
| XPER | 22 | 179844 | -1 |
| SGMO | 20 | 130241 | -8 |
| PRO | 20 | 346531 | 1 |
| Average | 14.6 | 124955 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $125 million. That figure was $897 million in VSAT’s case. Xperi Holding Corporation (NASDAQ:XPER) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks ViaSat, Inc. (NASDAQ:VSAT) is more popular among hedge funds. Our overall hedge fund sentiment score for VSAT is 79. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on VSAT as the stock returned 51% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
