Fixed Satellite Services: Is It Time To Take Another Look?

摘要

It is time for investors to revisit the Fixed Satellite Services (FSS) industry. We realize that satellite and telecom infrastructure plays are currently far from vogue. However, FSS is a $7 billion global industry with high barriers to entry that throughout the next several years should experience stable, albeit moderate, revenue growth, has very high EBITDA margins, and generates strong cash flow even in a negative economic environment. No doubt, the industry is working its way through a bout of overcapacity, but this is being met by solid demand growth from new video and data applications, and we expect the larger operators to benefit even further from consolidation arid expansion into value-added services. Given the depressed levels at which all of these companies are currently trading, we believe the best of them represent good investments.