The Satellite News Financial Ticker

By | July 12, 2004 | Feature

Week of July 1-8, 2004
Percentage Change
Symbol
July 8 Price
One Week
One Month
Three Month
Year to Date
Operators
APT SATELLITE HLDGS ATS
1.71
(12.3)
(14.9)
(28.2)
ASIASAT TELECOM SAT
16.65
(1.2)
0.4
(6.7)
(12.3)
BRITISH SKY BROADCASTING BSY
45.10
(0.9)
1.9
(11.1)
(11.5)
ECHOSTAR COMM -CL A DISH
29.25
(4.9)
(8.0)
(11.3)
(13.9)
THE DIRECTV GROUP DTV
17.03
(0.4)
(3.0)
5.6
2.9
LORAL SPACE & COMM LOR
0.15
3.4
(3.2)
(74.1)
(52.4)
NEWS CORP NWS
34.79
(1.8)
(6.1)
(9.1)
(3.6)
NEW SKIES SATELLITES NSK
7.72
(0.4)
(0.1)
10.3
7.8
PANAMSAT SPOT
23.18
(0.2)
(0.7)
(6.1)
7.5
PASIFIK SATELIT NUSANTARA PSNRY
0.22
46.7
340.0
PEGASUS COMMUNICATIONS PGTV
22.84
(6.6)
25.5
(37.9)
(18.7)
SES GLOBAL SESF.LU
7.18
3.3
3.3
2.6
(10.3)
SIRIUS SATELLITE RADIO SIRI
2.78
(9.7)
(13.4)
(30.8)
(12.0)
XM SATELLITE RADIO XMSR
25.87
(5.2)
6.2
(13.4)
(1.6)
Operators’ Average 100.00
(2.6)
0.2
(10.7)
13.8
Manufacturers
ANDREW ANDW
17.88
(10.6)
(11.3)
(14.0)
54.3
BALL BLL
71.61
(0.6)
2.0
2.6
20.2
BOEING BA
49.97
(2.2)
3.8
19.7
18.6
COM DEV INTL *CDV
3.55
(2.5)
11.3
29.1
23.3
EMS TECHNOLOGIES ELMG
17.33
(10.8)
(17.5)
(20.2)
(15.6)
GARMIN GRMN
35.29
(4.8)
0.5
(16.9)
(35.2)
GILAT SAT NETWORKS GILTF
4.82
(16.2)
(13.2)
(47.4)
(1.4)
GLOBECOM GCOM
5.54
5.7
(0.2)
(0.2)
16.6
HARRIS HRS
48.37
(4.7)
4.6
(4.3)
27.5
HONEYWELL HON
35.54
(3.0)
2.5
2.7
6.3
KVH KVHI
9.51
(25.9)
(28.4)
(33.8)
(65.5)
LOCKHEED MARTIN LMT
53.30
2.3
7.0
11.6
3.7
LUCENT TECHNOLOGIES LU
3.46
(8.5)
0.3
(21.7)
21.8
MOTOROLA MOT
17.42
(4.5)
(14.6)
(3.5)
24.4
ORBITAL SCIENCES ORB
12.90
(6.6)
(0.5)
7.3
QUALCOMM QCOM
70.65
(3.2)
2.9
3.2
31.0
RAYTHEON RTN
34.61
(3.2)
2.4
9.1
15.2
ROCKWELL COLLINS COL
33.11
(0.6)
4.1
1.5
10.3
SCIENTIFIC-ATLANTA SFA
31.70
(8.1)
(11.9)
(6.0)
16.1
SKY FRAMES SKYU
0.05
(50.0)
400.0
(50.0)
(50.0)
TITAN TTN
12.02
(7.4)
(36.9)
(38.7)
(44.9)
TRIMBLE NAVIGATION TRMB
24.41
(12.2)
(11.8)
1.2
(1.7)
VIASAT VSAT
22.06
(11.6)
(8.0)
(16.6)
15.3
Manufacturers’ Average 100.00
(8.2)
12.5
(8.4)
4.2
Nasdaq Composite Index
Nasdaq comp
1,935.32
(5.5)
(4.2)
(5.6)
(3.4)
SP 500 sp50
1,109.10
(2.8)
(2.7)
(2.8)
(0.3)
SN Stock Price Average
100.00
(6.1)
7.8
(9.3)
7.9

Wall Street Analysis

By Paul Dykewicz

Satellite and cable TV service providers are becoming more attractive investment options due to the huge amount of cash flow that they will generate during the next five years.

That is the word from Morgan Stanley’s Richard Bilotti, a cable and satellite analyst. He upgraded his rating of the cable/satellite TV sector to “attractive” last week on the belief that recent “punishment” meted out by the market, coupled with aversion to continued equity value erosion, will spur management teams to consider returning capital to shareholders.

The five largest cable and satellite TV companies should produce $68 billion of free cash flow during 2004-2009, Bilotti said. That free cash flow should cause dividend payouts by those companies to rise by 50 percent during the next five years. In addition, the free cash flow growth rate of cable and satellite companies will be “materially” above the regional telephone companies. He based his upgrade of the cable and satellite TV companies on 15 percent free cash flow compounded annual growth rate (CAGR) for 2004-2009, flat capital expenditures and higher dividend/buy-back ratios.

“The poor performance of media versus the broader market has been driven primarily by investors’ lack of confidence in management returning capital to shareholders,” Bilotti wrote in a July 8 research note. “Current share prices seem to indicate that investors are skeptical of whether pay-out ratios will ever exceed 25 percent.”

Among the various cable and satellite companies, The DirecTV Group [DTV] has the “best upside” but almost all of the companies are attractive, Billoti wrote. The true leverage in the DBS model is seen in declining marketing costs as a percentage of revenue, he continued. He expressed the view that market share growth in DBS will drive mid-teens revenue growth for the next two years.

It is refreshing to hear that the billions of dollars in capital expenditures by cable and satellite companies in recent years are going to benefit investors of these stocks in the coming years. DirecTV and its well-established satellite TV rival, Littleton, Colo.-based EchoStar Communications [DISH], appear to have a steady and growing cash flow in the years ahead that should give both companies terrific access to the capital markets as they pursue growth opportunities in the future.

Paul Dykewicz is senior editor and senior analyst of Satellite News. He can be reached at 301/354-1769 or at pdykewicz@accessintel.com.

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