Is ViaSat, Inc. (NASDAQ:VSAT) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is ViaSat, Inc. (NASDAQ:VSAT) a healthy stock for your portfolio? Hedge funds are becoming less hopeful. The number of long hedge fund positions were cut by 1 lately. Our calculations also showed that VSAT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). VSAT was in 27 hedge funds’ portfolios at the end of September. There were 28 hedge funds in our database with VSAT holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are perceived as worthless, old financial vehicles of the past. While there are more than 8000 funds with their doors open at present, We look at the masters of this club, about 750 funds. These hedge fund managers have their hands on the lion’s share of the hedge fund industry’s total capital, and by tracking their first-class investments, Insider Monkey has formulated several investment strategies that have historically beaten the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s go over the new hedge fund action regarding ViaSat, Inc. (NASDAQ:VSAT).
How have hedgies been trading ViaSat, Inc. (NASDAQ:VSAT)?
Heading into the fourth quarter of 2019, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VSAT over the last 17 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Seth Klarman’s Baupost Group has the biggest position in ViaSat, Inc. (NASDAQ:VSAT), worth close to $1.0343 billion, comprising 11.7% of its total 13F portfolio. Sitting at the No. 2 spot is Bob Peck and Andy Raab of FPR Partners, with a $377.1 million position; the fund has 8.6% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism consist of Crispin Odey’s Odey Asset Management Group, Mason Hawkins’s Southeastern Asset Management and David E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to ViaSat, Inc. (NASDAQ:VSAT), around 17.34% of its portfolio. Baupost Group is also relatively very bullish on the stock, earmarking 11.71 percent of its 13F equity portfolio to VSAT.
Judging by the fact that ViaSat, Inc. (NASDAQ:VSAT) has witnessed declining sentiment from hedge fund managers, we can see that there exists a select few hedgies who were dropping their full holdings in the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, comprising about $3.1 million in stock, and Cliff Asness’s AQR Capital Management was right behind this move, as the fund dumped about $0.9 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ViaSat, Inc. (NASDAQ:VSAT) but similarly valued. We will take a look at Foot Locker, Inc. (NYSE:FL), Avnet, Inc. (NASDAQ:AVT), The Wendy’s Company (NASDAQ:WEN), and Bilibili Inc. (NASDAQ:BILI). 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|
View table here if you experience formatting issues.
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $625 million. That figure was $1902 million in VSAT’s case. The Wendy’s Company (NASDAQ:WEN) is the most popular stock in this table. On the other hand Bilibili Inc. (NASDAQ:BILI) is the least popular one with only 18 bullish hedge fund positions. ViaSat, Inc. (NASDAQ:VSAT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately VSAT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); VSAT investors were disappointed as the stock returned -2.4% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.