Seth Klarman Stock Portfolio: Top 10 Stock Picks

7. ViaSat Inc. (NASDAQ:VSAT)

Total Number of Shares Owned: 13,759,364

Total Value of Shares Owned: $174,744,000

Number of Hedge Fund Investors: 17

The demand for high-speed satellite internet is on the rise, especially in underserved areas, and ViaSat, Inc. (NASDAQ:VSAT) is well-positioned to meet this need. The recent launch of its new satellites, particularly the ViaSat, Inc. (NASDAQ:VSAT)-3 constellation, is set to enhance its service capacity and quality, making it an attractive option for customers seeking reliable internet access.

In its Q2 2024 earnings report, ViaSat, Inc. (NASDAQ:VSAT) demonstrated significant revenue growth, driven by solid performance in both its Commercial Networks and Government segments. ViaSat, Inc. (NASDAQ:VSAT) also improved its EBITDA margins, reflecting better operational efficiencies, and successfully added new clients across various sectors, showcasing its expanding market presence.

Strategic partnerships with telecommunications companies further bolster ViaSat, Inc. (NASDAQ:VSAT)’s position, enabling it to penetrate new markets and acquire more customers. Additionally, ViaSat, Inc. (NASDAQ:VSAT) is committed to innovation, investing heavily in research and development to advance its satellite technology. This focus on next-generation solutions enhances service quality and expands capacity, solidifying ViaSat, Inc. (NASDAQ:VSAT)’s status as a leader in satellite communications.

ViaSat, Inc. (NASDAQ:VSAT)’s efforts to expand internationally, particularly in Europe and Asia, are also noteworthy, as they open up new revenue streams and diversify its customer base. ViaSat, Inc. (NASDAQ:VSAT) maintains a strong balance sheet with manageable debt and ample liquidity, giving it the flexibility to invest in growth and adapt to changing market conditions.

Baupost Group has a substantial stake of 13,759,364 shares valued at roughly $174.7 million, as of Q2 2024.

Cove Street Capital Small Cap Value Fund stated the following regarding Viasat, Inc. (NASDAQ:VSAT) in its Q2 2024 investor letter:

“Viasat, Inc. (NASDAQ:VSAT) has no friends. We are in the limbo of waiting for the launch of two satellites, with essentially $1 billion of cost sitting around in warehouses. We expect those satellites to be in service mid-25 and late-25. There is no growth until then, as the company has slowly abandoned the rural broadband market to allocate limited capacity to their commercial markets.

There is tremendous “not being monetized” value in the Viasat/Inmarsat combination given commercial and defense opportunities in space in the decades ahead, but a pair of satellite failures has clearly given Starlink and eventually Kuiper a complete 4 year “gimme” to develop as formidable competitors. Irrelevant at current stock price. The defense business is arguably worth 2x the current market cap.”