John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Gilat Satellite Networks Is Another Attractive Opportunity Caused By Sequestration

Key takeaways

  • Gilat Satellite Networks (NASDAQ:GILT) trades at a low multiple due to recent budget cuts.
  • However, defense represents a shrinking portion of an increasingly diversified revenue stream.
  • Moreover, an activist-oriented management and multiple "free call options" provide additional upside potential.

Company overview

GILT is a global provider of broadband satellite communication equipment as well as networking products and services. Equipment revenue is generated primarily from the sale of VSATs*, hubs, SSPAs, (solid state power amplifier) and low-profile antennas. Service revenue includes access to and communication via satellites, installation of network equipment, telephone and internet services, consulting, online network monitoring as well as network maintenance and repair.

GILT operates through three reporting segments:

    The commercial segment provides VSAT...
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