Here is the full report:
From Investor Guru
investor1.com
ECHOSTAR COMMUNICATIONS (Q DISH) Oct. 12, 1997
DISH hit $25 recently, a 1997 high. Waiting for a pullback to add.
Aug. 31, 1997
Tee-Com is now bust and recently AlphaStar announced they have stopped broadcasting. Star Choice has announced a rebate for Alpha Star's customers to sign up with them. We remain nervous about the Canadian TV satelite industry as long as the CRTC regulates content. DISH, Direct TV and Primestar continue to be the main players. DISH is starting to perk up nicely, now over $17. We are hoping it settles back to around $15 again, so that we can add some more DISH shares.
June 15, 1997
While looking for a TV satelite dish, we became aware of EchoStar and the Dish Network. I guess you could say DISH was a Peter Lynch style stock pick for us. See www.dishnetwork.com . DirecTV with 2.6 million subscribers is the largest in the business, but EchoStar at 600,000 subscribers is the fastest growing of all the TV satelite companies. Dish has lower rates for comparable programming and they have their own satelite, programming and hardware. DirecTV leases air space from Hughes and EchoStar's satelites, and several manufacturers make their hardware.
The only sales pitch offered for DirecTV over Dish was that they had somewhat more sports channels. DISH's 10 or so sports channels is enough for most sports fanatics, including us. Based on programming options, flexibility, pricing and accessibility, EchoStar won easily. They supposedly have a more advanced system as well.
We believe this represents a huge potential growth opportunity in a hot growth area. I know I can't wait to get rid of my cable company. The market looks doubtful at best for Canadian satelite companies, with Tee-Com declaring bankruptcy just days ago. This is a business where market share and pricing power is king, just like in cable, and mega mergers continue to consolidate the industry. We figure DISH will do about $2 billion in sales and will be a surviver.
There are substantial risks as well. It's a ferocious business where financials will probably continue to flow red ink for a few more years. Lately, Ruport Murdoch and NewsCorp tried to do a deal with DISH for $1 billion. The deal fell apart, will now go to the courts, and NewsCorp is now looking to do a controversial new deal with Prime Star, which is mainly owned by the cable operators. Many doubt the deal will go through when subjected to several government regulators and antitrust rules. DLJ Donaldson Lufkin Jenrette (our favorite US research firm) is now arranging a $400+ million financing for DISH to meet their business plan goals and growth plans. DISH could be an exciting stock and has traded as high as $40.50 and down to $15 where it is now. We are still trying to figure out if DISH has hit bottom and are watching their stock, as well as their TV programming, very closely.
cheers,
Kent |
