Top 5 Stock Picks of Peter S. Park’s Park West Asset Management

3. Vonage Holdings Corp. (NASDAQ:VG)

Park West Asset Management Stake Value: $202,929,000
Percentage of Park West Asset Management’s 13F Portfolio: 4.81%
Number of Hedge Fund Holders: 29

Vonage Holdings Corp. (NASDAQ:VG) provides communication services to customers via cloud-connected devices. Park West Asset Management is Vonage Holdings Corp. (NASDAQ:VG)’s largest shareholder. It has a $202.93 million stake in the firm. The hedge fund increased its position in Vonage Holdings Corp. (NASDAQ:VG) by 32% in the third quarter of 2021.

Ericsson had agreed to buy all of Vonage Holdings Corp.’s (NASDAQ:VG) outstanding shares on November 22. As a result, Citi analyst Michael Rollins downgraded Vonage Holdings Corp. (NASDAQ:VG) to “Neutral” from “Buy” with a price target of $21, as he does not expect any rival bids for Vonage Holdings Corp. (NASDAQ:VG) at this time.

At the end of the third quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $843.02 million in Vonage Holdings Corp. (NASDAQ:VG), as compared to a similar number of funds in the preceding quarter, with stakes equaling $708.09million.

Adestella Investment Management, in its fourth-quarter 2020 investor letter, 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.”