Is Viavi Solutions (VIAV) an Underappreciated Stock?

Core Viewpoint - Madison Small Cap Fund underperformed in Q4 2025, returning -0.4% compared to the Russell 2000 Index's 2.2% return, with sector allocation, particularly in healthcare, negatively impacting performance [1] Group 1: Fund Performance - The fund's Class I shares returned -0.4% in Q4 2025, lagging behind the benchmark's 2.2% return [1] - The healthcare sector was identified as the weakest performer for the fund during this quarter [1] Group 2: Viavi Solutions Inc. Overview - Viavi Solutions Inc. (NASDAQ:VIAV) is a key investment for the fund, providing network test, monitoring, and assurance solutions across various sectors [2][3] - As of March 12, 2026, Viavi's stock closed at $29.76, with a one-month return of 13.20% and a 52-week gain of 172.03% [2] - Viavi has a market capitalization of $6.89 billion [2] Group 3: Strategic Developments - Viavi Solutions operates through two segments: Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) [3] - The company made a $1.3 billion bid for Spirent Communications, which was countered by Keysight Technologies at $1.46 billion, leading to antitrust concerns from the U.S. Department of Justice [3] - The DOJ required Keysight to divest overlapping business units to Viavi, which closed on October 16, enhancing Viavi's position in the data center ecosystem and expected to accelerate growth and margin expansion [3] - The market is believed to not fully recognize Viavi's potential in the data center market, with an estimated intrinsic stock value of $30 [3]