Is There Tremendous “Not Being Monetized” Value in Viasat (VSAT)?

Investment management company Cove Street Capital recently released its “Small Cap Value Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -10.77% (net of fees) compared to -3.28% for the Russell 2000 Index and -3.64% for the Russell 2000 Value Index. For the first half of 2024, the S&P 500 is up 15%. Its biggest component, Nvidia, has increased by 150% over that time. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Cove Street Capital Small Cap Value Fund highlighted stocks like Viasat, Inc. (NASDAQ:VSAT), in the second quarter 2024 investor letter. Viasat, Inc. (NASDAQ:VSAT) offers broadband and communications products and services. The one-month return of Viasat, Inc. (NASDAQ:VSAT) was 1.40%, and its shares lost 66.36% of their value over the last 52 weeks. On July 9, 2024, Viasat, Inc. (NASDAQ:VSAT) stock closed at $14.76 per share with a market capitalization of $1.853 billion.

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.”

A telecommunications tower reaching high into the sky, connected to a satellite system.

Viasat, Inc. (NASDAQ:VSAT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Viasat, Inc. (NASDAQ:VSAT) at the end of the first quarter which was 15 in the previous quarter. While we acknowledge the potential of Viasat, Inc. (NASDAQ:VSAT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Viasat, Inc. (NASDAQ:VSAT) in another article and shared the list of best up and coming stocks to buy according to hedge funds. Cove Street Small Cap Value Fund shared its optimistic views on VSAT in its Q1 2024 investor letter. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.