The Satellite News Financial Ticker

By | October 20, 2003 | Feature

Week of Oct. 10 – 16, 2003
Percentage Change
Symbol
Oct. 16 Price
One Week
One Month
Three Month
Year to Date
Operators
APT SATELLITE HLDGS ATS
2.16
3.3
(7.3)
(46.5)
25.6
ASIASAT TELECOM SAT
16.05
5.6
(0.5)
(5.9)
40.9
BRITISH SKY BROADCASTING BSY
43.16
5.0
4.7
(4.1)
7.7
ECHOSTAR COMM -CL A DISH
39.92
(0.7)
7.4
7.1
79.3
HUGHES ELEC (GM -CL H) GMH
15.45
2.9
7.1
12.0
44.4
LORAL SPACE & COMM LOR
0.40
53.8
66.7
(86.7)
(90.7)
NEWS CORP NWS
34.59
3.2
3.7
12.2
31.8
NEW SKIES SATELLITES NSK
5.83
(0.3)
5.6
6.2
40.5
PANAMSAT SPOT
19.00
24.4
27.4
3.3
29.8
PASIFIK SATELIT NUSANTARA PSNRY
0.08
(56.8)
(51.5)
(44.8)
(46.7)
PEGASUS COMMUNICATIONS PGTV
13.94
(2.1)
(4.1)
(57.7)
6.4
rSTAR CORP RSTRC
0.62
1.6
(11.4)
14.8
158.3
SES GLOBAL SESF.LU
7.55
14.7
20.8
32.5
18.0
SIRIUS SATELLITE RADIO SIRI
2.37
21.5
40.2
33.4
270.3
XM SATELLITE RADIO XMSR
20.31
18.8
24.0
54.6
655.0
Operators’ Average
100.00
6.3
8.9
(4.6)
84.7
Manufacturers
ANDREW ANDW
13.43
2.1
(3.2)
16.9
30.6
BALL BLL
56.10
(0.2)
5.2
31.8
9.6
BOEING BA
37.45
3.2
5.5
12.0
13.5
COM DEV INTL CDV.TO
2.70
27.4
36.4
92.9
172.7
EMS TECHNOLOGIES ELMG
19.09
8.7
8.3
20.1
22.6
GARMIN LTD. GRMN
44.75
0.3
6.4
5.8
52.7
GILAT SAT NETWORKS GILTF
4.65
(12.6)
4.5
(26.7)
(40.4)
GLOBECOM GCOM
4.05
(6.3)
(5.8)
(0.5)
8.0
HARRIS HRS
36.11
(0.1)
6.2
18.0
37.3
HONEYWELL HON
29.60
7.3
4.7
6.2
23.3
KVH KVHI
27.25
(5.1)
(5.2)
15.1
216.9
LOCKHEED MARTIN LMT
45.73
(0.3)
(10.3)
(7.2)
(20.8)
LUCENT TECHNOLOGIES LU
2.35
2.6
4.0
22.4
86.5
MOTOROLA MOT
13.70
0.2
28.0
40.1
58.4
NERA NERAY
2.31
5.3
0.7
36.0
113.3
ORBITAL SCIENCES ORB
9.98
4.4
5.6
22.9
136.5
QUALCOMM QCOM
44.87
3.7
3.3
18.7
23.3
RAYTHEON RTN
28.11
2.1
(10.2)
(13.1)
(8.6)
ROCKWELL COLLINS COL
26.78
3.8
6.4
4.2
15.1
SCIENTIFIC-ATLANTA SFA
36.65
8.1
11.2
41.0
209.0
SKY FRAMES SKYU
0.95
(6.9)
(17.4)
(35.6)
(88.1)
STM WIRELESS STMI
0.01
150.0
(20.0)
(95.0)
TITAN TTN
21.00
(0.1)
23.8
85.8
101.9
TRIMBLE NAVIGATION TRMB
23.43
(0.6)
(11.0)
(10.4)
87.6
VIASAT VSAT
20.22
(5.6)
24.4
38.8
75.2
Manufacturers’ Average
100.00
1.7
10.9
16.6
49.7
Nasdaq Composite Index COMP
1,950.14
3.0
5.7
11.2
46.0
S & P 500 SP50
1,050.07
1.6
3.5
5.0
19.4
SN Stock Price Average
100.00
3.4
10.1
8.6
62.8

Wall Street Analysis

By Tom Watts, SG Cowen Securities

Since PanAmSat [Nasdaq: SPOT] reported third quarter results last week, its stock has risen 19 percent from $16 to nearly $19. We believe two factors have driven the rise: 1) investors re-focusing on its fundamentals, and 2) EchoStar Communications’ [Nasdaq: DISH] bid for the North American satellite assets of Loral Space and Communications. The bid for the Loral fleet, which competes directly with PanAmSat’s North American satellites, highlights PanAmSat’s intrinsic value.

On fundamentals, PanAmSat offers three compelling characteristics. First is valuation. It trades at only 6.6x our 2004E free cash flow per share of $2.82. Second is sectoral. The fixed satellite services (FSS) sector where PanAmSat competes appears to be bottoming after several tough years. Consensus holds that an upturn should be visible by mid-2004. Third is strategic. News Corp [NYSE: NWS] seems poised to dress up and sell PanAmSat during the next two years. Remember, News Corp is purchasing 34 percent of Hughes Electronics [NYSE: GMH], which holds 81 percent of PanAmSat’s stock. News Corp is likely to take a series of steps to boost PanAmSat results over the coming quarters.

Of course, PanAmSat also has warts. Otherwise, the stock wouldn’t trade at only 6.6x cash flow. PanAmSat detractors argue that the FSS upturn will never come since advanced compression could mute the demand surge expected from high-definition TV. Detractors also point to how much of PanAmSat’s recent growth came from its March acquisition of Hughes’ defense satellite business. In the third quarter, defense contributed $21 million in revenue. Without this gain, PanAmSat’s third quarter revenue would have dipped 5 percent year- over-year. We expect further acquisitions in 2004 to boost both revenue and EBITDA results.

EchoStar’s bid last week for Loral’s North American satellites, slightly above Intelsat’s $1 billion bid, forced an auction that is scheduled to begin Oct. 20. The $1 billion level, presumably the price where bidding will start, represents about 7.5x 2003 EBITDA for the Loral satellites. As bidding proceeds, the price paid for Loral’s assets will provide an indication of PanAmSat’s inherent value.

Tom Watts is a managing director and satellite analyst at SG Cowen Securities. He can be reached by phone at 212/278-4260 or by e-mail at tom.watts@sgcowen.com . Readers should assume that SG Cowen Securities Corp. and/or its affiliates intend to offer services in investment banking to the above referenced companies within the next three months, and to seek compensation for such services.

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