Author Topic: SATS - Echostar  (Read 565 times)

whistlerbumps

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SATS - Echostar
« on: November 09, 2018, 08:45:12 AM »
Surprised this wasn't already a topic.... SATS is a provider of satellite broadband and satellite services to Dish and other networks.  Hughes broadband service is growing rapidly (EBITDA +25% y/y) as the company continues to increase subs and ARPU on its Jupiter 2 satellite as well as penetrate new countries.  ESS business is declining but a cash cow (capex 29K vs. EBITDA of 72M in MRQ).  Company also has upside optionality with its Dish Mexico stake (~$10 per share IMO) and European S Band spectrum (A little to more than the current share price for a WAG). 

Currently trading at less than tangible book value per share (~$38) with a good balance sheet and growing overall EBITDA.  Seems mispriced to me.  Anyone else have any thoughts?
« Last Edit: November 09, 2018, 05:33:12 PM by Parsad »


whistlerbumps

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Re: SATS - Echostar
« Reply #1 on: November 12, 2018, 07:34:30 AM »
SATS buyback on Friday...

On November 8, 2018, EchoStar Corporation (“we” or “our”) announced that our Board of Directors had authorized a plan to repurchase up to $500.0 million of our Class A common stock $.001 par value per share through and including December 31, 2019, subject to market conditions and other factors. On November 9, 2018, we repurchased 848,863 shares of our Class A common stock through open market repurchases in accordance with such plan.

peterHK

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Re: SATS - Echostar
« Reply #2 on: November 12, 2018, 08:29:00 AM »
I've always found this business extraordinarily hard to understand at first glance, so I've stayed away, but it's always made me curious. Do you have any good primers on key drivers/what makes a good satellite company?

Cheers!

whistlerbumps

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Re: SATS - Echostar
« Reply #3 on: November 12, 2018, 12:49:01 PM »
Two real businesses here.  Hughes which provides satellite-broadband and is the bulk of the value.  You can get some more information on this business by researching their competitor Viasat.  Hughes is by far the bulk of the business value here.

The second business is the ESS business.  While it has some other small businesses, the main business of ESS is leasing satellites to Dish.  This business should be in slow decline with step-downs when Dish doesn't renew a lease (like Echo 7 which hurt Q3).  That being said, its a cash cow and the decline should be very manageable and visible based on contract expiries. 

Hope that helps with the businesses.
Best,
TD