5 Stocks to Buy According to Cheyne Capital

4. Vonage Holdings Corp. (NASDAQ:VG)

Cheyne Capital’s Stake Value: $4,710,000
Percentage of Cheyne Capital’s 13F Portfolio: 3.97%
Number of Hedge Fund Holders: 37

Vonage Holdings Corp. (NASDAQ:VG) is a company that provides communication services using cloud-connected devices. Cheyne Capital initiated a new stake in Vonage Holdings Corp. (NASDAQ:VG) in the second quarter of 2022, buying 250,000 shares of the company, valued at $4.71 million.

On July 21, Swedish telecom equipment company Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) successfully closed the $6.2 billion acquisition of Vonage Holdings Corp. (NASDAQ:VG). Ericsson plans to improve the enterprise sector and grow its mobile network business by gaining access to Vonage’s CCaaS, UCaaS, and CPaaS technologies.

Phill Gross and Robert Atchinson’s Adage Capital Management is the largest shareholder of Vonage Holdings Corp. (NASDAQ:VG), with a stake consisting of 5.34 million shares worth more than $100.68 million. Vonage Holdings Corp. (NASDAQ:VG) experienced a decline in hedge fund interest in Q1 2022, as 37 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the period, down from 38 in the preceding quarter.

In its fourth-quarter 2020 investor letter, Adestella Investment Management mentioned Vonage Holdings Corp. (NASDAQ:VG). Here is what the fund said:

“Vonage (VG) – the VG thesis has largely played out as expected. The market has gradually shifted its focus from the declining consumer operations to the growing business ones, highlighted by the API unit. As its legacy home phone VOIP solutions continue to become a smaller and smaller portion of the overall pie, we think this trend will continue. If the API unit can continue to grow at 25-30%, that segment alone covers most of the enterprise value at just a ~6x sales multiple before giving any credit to the sizable UCaaS operations. The API unit’s closest comparable, Twilio (TWLO), currently trades at 31x sales, so it’s not unreasonable to think there’s upside to our estimate here. Shares have returned around 80% since our writeup (and slightly higher from our cost as we added in the weeks that followed), but we’ve maintained most of our position as the key growth drivers remain intact.”