Billionaire Mason Hawkins’ 10 Small-Cap Stocks with Huge Upside Potential

7. IAC Inc. (NASDAQ:IAC)

Market Capitalization: $2.85 billion

Number of Hedge Fund Holders:

Southeastern Asset Management Stake: $118,718,692

Analyst Upside Potential: 41.37%

IAC Inc. (NASDAQ:IAC) is another holding company that deals in digital and media business. The company operates through four main business segments including the Dotdash Meredith, Care.com, Search, and Emerging & Others segments. Its services range from digital content in various formats to healthcare staffing through Care.com and film production through IAC films.

On April 1st, the company completely spun off its entire ownership stake in Angi, making it an independent company. Management noted that IAC Inc. (NASDAQ:IAC) will now focus on its core businesses and look for new growth opportunities. The company had to bear a negative revenue growth quarter due to the underperformance of Angi business. During the fiscal fourth quarter of 2024, the company reported $989.3 million in revenue down 6% year-over-year. However, on the bright side, Dotdash Meredith remained positive with 10% growth year-over-year.

Longleaf Partners Fund mentioned IAC Inc. (NASDAQ:IAC) in its Q1 2025 investor letter, stating that the company was one of the top contributors driven by the spin-off of Angi. Here’s what the fund said about the company:

“IAC Inc. (NASDAQ:IAC) – Digital holding company IAC was another solid contributor for the quarter. In January, the company announced that former CEO Joey Levin would be shifting his focus to become Executive Chairman at IAC portfolio business Angi. Barry Diller is taking on a larger role at IAC while continuing to be its Chairman. Initially, the market reacted cautiously, but as the quarter went on, the potential benefits became clearer, especially in conjunction with the recently completed spin-off of Angi. During the quarter, we published our first Research Perspectives note that provides more details on our investment case for IAC.”