The Satellite News Financial Ticker
|
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 [email protected] . 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.