Everyone:
Wall Street likes to use a quick and easy valuation technique for companies like Loral or PanAmSat that might give a little guidance to the stock price. This is extremely rough though, because Loral is not the same type of company as PanAmSat. A xcompany would be valued at 9X its EBITDA. The following prices would result:
1999 30
2000 45
2001 60
2002 91
Not bad, but definitely conservative by any measure. For the conservative among us, it is probably more appropriate to apply this valuation technique only to Skynet/Orion/SatMex. If we do this to this division in the year 2000, we come up with a value of $23/share for that division alone. The rest of the company is free!! I look at these kind of numbers as a reassurance that the company does not rely on any one division to succeed. So, if we buy today based only on that one division in the year 2000 being worth the current price, then Globalstar, Space Systems/Loral, Cyberstar, rural telephony via GEO, the 14 transponders on Agila-2, CD Radio, and any new acquisitions are gravy! Friends, I have never come across a company that I could be so certain of in the future--huge developing industry, excellent leader, management that is as deep and experienced as one could ever asemble, enormous barriers to entry by competitors, wide margins, etc.---you take it from there! |
