EchoStar Corp. (NASDAQ:SATS)

- mid teen 2014 FCF yield
- new Ka-band satellite transformational for consumer broadband business; this market is still under-penetrated
- also buying a smart management headed by Charlie Ergen

Positive:
- Innovative company at the interface of customers and the communication revolution

Negative:
- Not really cheap

Category: R13BRm

Echostar is now providing much more than just satellite receivers to it's sister company DISH Network (DISH) it's purchase of sling media and constant product and engineering innovations will serve the company well as they begin to sell outside of their sandbox.

new products are coming from SATS

Undervalued!

This may take longer than most people thought to realize value, yet it appears value will be realized, it's just a matter of time.

Satellite dish network is still a bit of a growth opportunity, and the stock is substantially undervalued right now.

trading at less than half of liquidation value (current assets - current liabilities) and way below book

vanamonde

5 Star rating w/ P/E Ratio of 0.0 following a significant drop in market (S&P @ 907). Price above 52 wk low w/ a range of 18.25-41.74. Currently above the SPY by about 2%. Hold till price reaches about $50.00 and re-evaluate.

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.

Spin-off

This looks like a steal at these levels--trading at ~65% of book. Assuming we're not looking at a market that takes 10 years to recover, I can see SATS more than doubling over the next 1-3 years.

--jk

Grossly undervalued

If you subtract out the Current Assets, for $1.4b you get a leading Set-top box manufacturer, a fixed satellite service business with a large amount of unutilized capacity, 8 satellites, a promising startup (slingbox) with the next big thing in tv viewing technology, and 30million shares of Terestar (TSTR).

ONE TO WATCH

just watch.

yeah

This is the way the world is turning

Echostar Corporation (SATS) is manufacturer of high-definition set top boxes for digital television, plus it owns and leases satellites. It also owns Sling Media, a small firm on the cutting edge of mobile and media technology.

It was just spun out from Dish Network. This will give it the freedom to seek new customers for its set top boxes and customers for bandwidth on its satellites. This should unlock a lot of value.

SATS trades at $2.5B market cap vs. book value of $3.3B. It has $1.1B net cash. Annual sales are $2.0B.