EchoStar Corp. (NASDAQ:SATS)

CAPS Rating: 3 out of 5

Recs

4
Player Avatar TheBiggestD (29.57) Submitted: 10/15/2008 3:05:16 PM : Outperform Start Price: $20.42 SATS Score: +14.89

If you don't know much about EchoStar (SATS, news, msgs), you're not alone. The company has virtually no analyst coverage, and its CEO, Charles Ergen, keeps a low profile. But down at these levels, Glenn Tongue at Tilson Focus Fund (TILFX) suggests putting EchoStar on your radar screen because he thinks it's a screaming buy.

Spun off from satellite TV company Dish Network (DISH, news, msgs) at the start of the year, EchoStar is a mix of a satellite business, a digital broadcast business, $1.1 billion in cash, nearly a half billion dollars worth of investments and a consumer-products division offering devices used in home entertainment.

By Tongue's calculation, the company now trades for substantially less than the value of just its cash and the satellite and broadcast businesses. He puts the value of these components at $25.60 a share. The stock recently traded for $20.50. So anyone who buys the stock now gets all the rest "for free," and then some. How much is the rest of the company worth?

EchoStar sells set-top boxes primarily to Dish Network, a business Tongue believes is worth as much as $2.4 billion. EchoStar also has a product called Sling that acts like a TiVo device and broadcasts digital signals throughout the home. Tongue thinks Sling is worth at least the $380 million that Ergen and Dish Network paid for it last October. Combined with the investments and other technology, the parts you are getting "for free" are worth anywhere from $25.60 to $36.60 a share, Tongue says. The key takeaway: The whole business is worth $51 to $62 a share, for potential gains of 150% to 300% from here.

Member Avatar cuculan (< 20) Submitted: 7/16/2010 3:00:37 PM
Recs: 0

I'm thinking the same. It's Price per book is 0.6 and it's P/E is less than 4, it's net profit is 21%, it has practically no debt.. Is there something we don't know? This stock looks like an absolute steal?

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