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Technology Stocks : Loral Space & Communications

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To: Michaelth1 who wrote (8493)10/16/2000 2:41:12 PM
From: Investartist  Read Replies (1) of 10852
 
LOR vs. GMH in earnings.

For every $1000 invested in Loral TODAY, the company will gross about $1098 this year. For every $1000 invested in GMH TODAY the company will gross about $134 this year.

For every $1000 invested in Loral today, the company earned $34 of positive EBIDTA last quarter. For every $1000 invested today in GMH, the company earned $4 of positive EBIDTA last quarter.

I ask you, which company is more likely to be worth 10 times more in share value from today in the next few years?
(Notwithstanding the buyout)

Here's my math. Correct me if any numbers appear to be incorrect:

Loral is very oversold at this time relative to Hughes (GMH). BOTH COMPANIES ARE EBIDTA POSITIVE! Based on the June 2000 EBIDTA and the 12/99 full year revenues consider the following

EBIDTA per share for 6/00 Quarter:

Loral= $0.15 for June Quarter

GMH= $0.127 for June Quarter

Gross Revenues per share based on last 12 months as per MSNMoneyCentral

Loral= $4.78 of gross revenue per share

GMH= $4.17 of gross revenue per share

Price per share as of today

Loral= $4.38 per share

GMH= $31.15 per share

THEREFORE the market is currently paying the following for revenue:

Loral= $4.38 per share for $4.78 gross revenue per share = 0.91 times revenue

GMH =$31.15 per share for $4.17 gross revenue per share = 7.47 times revenue
________________________________________________
Loral EBIDTA =$4.38 per share for a positive $0.15 EBIDTA revenue last quarter= 29.2 times last quarter's EBIDTA

GMH EBIDTA =$31.15 per share for a positive $0.127 EBIDTA revenue last quarter = 245 times last quarter's EBIDTA

HENCE, Loral is highly undervalued relative to GMH. The market is paying over 8 times as much for GMH as Loral for each dollar of gross revenue and each dollar of EBIDTA.

I repeat, Loral is highly undervalued and is a very good investment in my opinion at this time.

Investartist
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