RRSat Global Communications Network Ltd. (NASDAQ:RRST)

What drew me to RRSat are the cold financial fiqures. Order book of 170m on revenues of 100m gives some safety as does the price to tangible book ratio of 1.5. Revenues have been growing 20% a year and the ROE has been sailing between 11%-15% and ROA between 8%-13%. Dividend yield is over 3% and 70% of stock is owned by insiders (Two investment firms. Kardan N.V & InterGamma Investment) so this could propably be a buyout candidate also.

While 2010 wasn´t a great year for them in terms of growing EPS or FCF, they have been growing their revenues and book to bill ratio. I think they are nicely positioned to benefit from the growing consumer demand of HD broadcasts and digital content in general. Their geographical position in Israel is ideal as it is a newsrich area and global companies are in need of their equipment near the hotspots. Being close to the emerging markets of Africa & Pacific Asia isn´t a bad thing either.

I think a fair value would be 10$. That would mean 2x tangible book, forward P/E of 15, PEG ratio of 1 and thats the same number that i get from the DCF analysis using a discount of 12%, growth of 10% for 10 years and a terminal rate of 2%. Pretty conservative estimates that leave a margin of safety of 30%.

Full article:
http://nestortheinvestor.blogspot.com/2010/12/rrsat-consumer-play-disguised-as-tech.html

NMC

GROWTH COMPANY WITH GOOD DIVIDEND PLUS CURRENCY DIVERSIFICATION THAT IS AVAILABLE CHEAPLY BECAUSE IT MISSED ITS EARNINGS SLIGHTLY.
HIGH INSIDER OWNERSHIP PLUS INSTITUTIONS MEANS A THIN MARKET = INEFFICIENT PRICING.

THIS IS ALONG-TERM HOLD (AS ARE ALL MY PICKS).

I OWN PERSONALLY

Very interesting small sat provider with solid balance sheet, consistent earns/revs growth, and a nice divvy while we wait.

Screener:
ROE > 10%
LT Debt - Equity < 50%
Dividend > 5%
Price-to-Book < 3
================
EBITDA Growing?: Check
Months of EBITDA to pay:
(LT Debt - Cash) - 0
Dividend - 5

RRSat is a satellite communication and production services company based in Israel. They are trading at 2.3x tangible book, 14.4x trailing earnings and 10x forward earnings. They are growing rapidly but have missed analysts estimates recently, leading to a beaten down stock price. I like the fact that they have global exposure and that their dividend policy shows they are serious about investors. Satellites will continue to be a strong growth market and I like RRST and IRDM in particular.

Clients: CNN, NBC, ABC, Fox News, Reuters, Dish Network, Fox Sports, Walt Disney Pictures, EuroNews, Russia Today, Asianet, Eurosport, CBS, Al Jazeera, MGM, RTVi, Far East TV, etc.

Recent news:
RRSat Global Communications Network Ltd. Declares Dividend; Issues Q1, FY 2010 Revenue Guidance; Q1 2010 Revenue Guidance Below Analysts' Estimates
Tuesday, 2 Feb 2010 07:47am EST

RRSat Global Communications Network Ltd. Issues Q4 2009 Revenue Guidance Below Analysts' Estimates
Thursday, 12 Nov 2009 07:57am EST

A well managed company with plenty of growth opportunity, a great backlog of work yielding good revenue visibility and a low PE for a growth company.

I don't mind waiting on this one and have been acquiring shares over the last 18 months. It's a long term play but one I expect to be quire profitable. In the meantime, digging the dividend!

upside

The company is in a strong financial position with quickly growing revenue

34Million is Cash with no long-term debt.

Attractive valuation on a P/E and P/Cash flow basis

Continued improvement of margins

Omg money maker

Usually this would be too close to the 52 wk high for me, as i like to sale at half right now. But this datat sheet on growth to debt and a forward looking strategy make this a great stock in the next 3-5 years. Buy, Hold, Enjoy.

Mmm...tv content...

Continued to grow during '08 market downturn. Outperforming S&P.

Net income +30% year over year. Assets four times liabilities. Long

term debt $0.0. Conservative, growth minded management. What

is not to llike? Buy, buy, buy.

Technology advancement is always paramount

jim oberweis 2009 pick

vanamonde

5 Star, Small- Cap, dividend paying company

As the price of travel goes up people will be looking for more ways to be entertained within their own home. Television, Internet and radio are likely to see increased demand; which will transfer into an increased demand for the services of this company.