Our Outlook on AST SpaceMobile

October 2025 

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end, and standardized performance can be obtained by viewing the fact sheet or by clicking here. Neither forward earnings nor earnings growth is a measure of a fund’s future performance.

During the third quarter we exited our long-held position in Encore Capital Group (2.9% of assets). With the passage of time, we have come to believe that Encore is an average quality business at best. In addition, it has largely exhausted its U.S. growth opportunity, and international markets are structurally less appealing.

The company’s business is cyclical, thriving when credit card delinquencies and charge-offs are rising and suffering when those trends reverse. We believe the cycle has peaked and is no longer a tailwind in the U.S., which has hastened our exit.

After quarter end, we had positive developments at AST Space Mobile that contributed to the stock moving from $49 at the end of September to $80 at the end of October.* This magnitude of appreciation, in a larger than usual position, had a meaningful impact on performance. Year to date through the end of October, the Hennessy Focus Fund was up 34.87% net of fees compared to the Russell 3000 Index up 16.85% and the Russell MidCap Growth Index up 12.52%.

During October, for risk management purposes, we sold about 25% of our AST shares at an average price of $83.89. This is not a reflection of our outlook for the business. It is a portfolio and risk management decision.  AST continues to be our highest conviction idea, and is tracking well against our thesis.

This is the first action we have taken in AST since adding to our position in December 2023. While not a factor in our thinking, this sale generated proceeds well in excess of the total funds we invested in AST (and we have about 75% of our shares remaining).

Some of the notable October (and late September) developments at AST include:

•    Finalized 10-year commercial agreement with stc group (Oct 29) – Secures access to key markets in the Middle East and North Africa. Includes $175 million in prepayments.

•    Raised $1.15 billion via convertible note (Oct 24) –Favorable terms on a significant capital raise. Will be used to accelerate and fully fund the buildout of initial global coverage. Brings cash balance to an estimated $2.6 billion.

•    Completed and delivered the first Block 2 Bluebird to India for launch (Oct 15) – This next gen satellite is 3.4x larger than its predecessor and kicks off AST’s aggressive build-launch cadence.

•    Finalized Verizon definitive commercial agreement (Oct 8) – Secures access to about 1/3rd of U.S. commercial wireless customers (2/3rds including AT&T).

•    Successful testing with Bell Canada (Oct 2) – VoLTE voice calls, broadband data, video streaming, and video calls with Bell Canada demonstrate efficacy and pave the way for Canadian coverage.

•    Opened a research center with Vodafone and the University of Malaga in Spain (Oct 1) – Another step to assembling a sovereign, pan European SCS ecosystem with Vodafone and other leading mobile operators. Includes participation by Meta focusing on WhatsApp audio and video calls.

•    Bankruptcy court confirms AST/Ligado L-band spectrum transaction (Sept 29) – Key milestone cleared for accessing 40-45 MHz of L-band MSS spectrum in the US/Canada/Mexico. Awaiting FCC approval.

Click here for a full listing of Holdings.

Click here for full, standardized Fund performance.