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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?

To: Beefeater who wrote (2222)	3/13/1998 10:36:00 AM
From: Geoff	Read Replies (1) \| Respond to of 10852

Readware on earnings and price targets. I agree that investors need to do their own research, and I think message boards can be useful tools for investors. Especially when you find diamonds in the rough, like the LOR thread here and on the AOL Fool. After participating on both for well over a year, one should be able to readily identify those who are honest, and those who are full of hot air. In Readware's case, I believe he, and Valueman as well as Mr. A, etc, offer valuable insights about the satellite industry. In my time on these two threads, I have noticed these LOR groups are saturated with posters who are quite knowledgeable in the satellite industry (at least they seem to be in line with what I learned when I was studying aerospace engineering at college for two years). But the point is, that these people's opinions can be quite helpful when deciding whether to invest, but of course, they should not be the sole reason for investing in a company. Wow, that was a mouthful, now on to Readware's comments ;) ============== Subject: Re: Transponder Margins Date: Fri, Mar 13, 1998 07:29 EST From: Readware Message-id: <19980313122900.HAA24530@ladder01.news.aol.com> Loral in the 4th qtr had "real" (= net) 4thj qtr earnings. It came from an unexpected appreciable expansion of transponder revenue margins (about 170 basis points) across its entire fleet. This margin expansion will hold for the Orion sat that enters the LOR orbit on 20 March. And also for the new Telstar VI being launched in October this year from the Kosmodrome and for Orion 3 also being launched this Autumn. That amounts to a net transponder increase of approximately 74. This basis point expansion of 170 in transponder margins over an additional 74 transponders accelerates Loral's earnings growth this year, and we will see this in the first qtr of 1998. What goes into transponder margin expansion is maintenance of costs, both fixed and variable, as well as increase in leasing costs to users as demand rises relative to a fixed supply. This may be the reason for the recent rise of LOR stock. I should add that transponder margin increases are long-lasting, are secular: they are not like commodities that can rise in value and then suddenly drop sharply. The market still has a high discount rate on LOR (= depressed price) deriving from the "event risk" discount satellite companies experience prior to constellation launches. I think that LOR will move substanitally more in price once the third G* launch occurs, then. By the way, I have received notice that the LOR and G* shareholder meetings are on 28 April 1998 at the New York City Essex House. Subject: Price Date: Fri, Mar 13, 1998 08:25 EST From: Readware Message-id: <19980313132501.IAA28292@ladder03.news.aol.com> No, the year-end price target remains $36/share. Loral Space and manufacturing is now 22 months old. The stock at spin-off was $14/share. Our $36/share year-end price is a projected appreciation attained after a corporate existence of 32 months (April 1996 to December 1998). That is a disciplined, modulated approach to pricing. If the stock rises substantially higher this year, so be it. One thing that cannnot be said is that the price objective of $36 by year end was "hype". Comparing LOR's price increase today from inception to the actual increase in the S&P 500 average shows that is has appreciated at a move somewhat higher than twice the S&P rate. Hundreds of stcoks have more than quadrupled the S&P 500 rate in the same time. One thinks Of Yahoo, Amazon, Earthlink, Mindspring, various semiconductor lithography issues, and even gaming technologies like SLOT. Questions on user demand for satcom technologies are healthy and to be expected. They would be answered accurately for those posing the questions if those so posing had contact with those demanding the technologies. If one is going to invest in these stocks, one does not remain in the United States and simply read newspapers and magazines that debate the merits, knowingly or ignorantly, of satcom claims. One goes to the source-- the markets where the demand is. An observation: there are 3 billion people in the world who have never made a phone call, to quote the G* chairman. Anyone who thinks that out of 3 billion people, G*, Iridium World, and ICO Global cannot get a user base of 10 million people-- 10 million, just has to be an elitist of the most peculiar sort. I have read characatures of Third World populations that arguably reflect more on the writer than the population being described. No wonder when an American visits other countries he hears the term "gringo", "Yanqui". One is reminded of accounts at the turn of this century of pundits confidently commenting that no one would ever use the Model T, or that the Wright Brothers were madmen. When Robert Goddard developed the first rocket, no one ever thought it would get off the ground, much less sustain flight. The rocket, you see, was just too heavy. Price objectives skepticism on Loral or Globalstar are probably best resolved for those posing the questions by their actually going to the markets I've mentioned, then, rather than simply reading studies and commentaries from "pundits" whose only qualifications for such commentary are overseas trips to vacation spots where the indigenous population behind their backs calls them "Yanqui" and "gringo".