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Intelsat: Sell And Lock In Profits

May 03, 2018 4:03 PM ETIntelsat S.A. (INTEQ)14 Comments
George Kesarios profile picture
George Kesarios


  • Intelsat's quarterly results were more or less inline.
  • However, for several quarters now, quarterly results are not the center of attention. The center of attention is the FCC outcome.
  • Not having enough clarity as to the roadmap of the FCC decision and given the mythical profits the stock has given, I am recommending selling Intelsat shares.

Intelsat's (I) Q1'18 results were nothing special. For the record revenue was $543.78M higher by 1% Y/Y, and adjusted EBITDA was $392 million, lower by 4% Y/Y. EPS came in at a loss of $0.56, missing by $0.17. Overall, I was not expecting anything of the quarter, and the results were ballpark of what I was expecting.

But if you have noticed, I have not paid much attention to Intelsat's earnings for several quarters now. This is because for some time now, everything has been about C-band licensing and not earnings.

As was expected, most questions in the conference call were about the C-Band spectrum. And to be honest, the questions in the conference call complicated matters a little instead of shedding light on the FCC outcome.

Let me share with you some of the dialogs.

We've had a number of meetings with representatives from the FCC. Their public comments and actions indicate an interest in our proposal.

While I would not expect Stephen Spengler to say anything that might conclude the proposal is a done deal, I did hope for something better than an indication of interest to the company's proposal.

An indication of interest was good enough to speculate on Intelsat shares when the stock was at $3 share. At $13, I need a little more confidence that the proposal will be accepted to continue holding the stock.

The process going forward will, no doubt, be a complicated series of events. The FCC controls the process, the timeline and the ultimate order. For that reason, as we answer questions today, we'll refrain from addressing topics that require speculation and stick to the fundamentals of our proposal.

This is something we know for a while now. And to be honest, it makes it very difficult to invest in a stock when

This article was written by

George Kesarios profile picture
I only look at stocks that have the possibility to double over a twelve month period and stocks in which the risk/reward ratio payout is high. In addition I focus on swing trade opportunities. I focus more on valuations and risk/reward metrics as opposed to what make companies tick. I have been a professional investor for over 20 years and during the past several years an economics analyst and financial writer for capital.gr, the biggest economic news portal in Greece. I have managed money from time to time and have also done some seed venture capital projects in the past.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (14)

David Orr profile picture
Mulled this stock over a lot. What are they really offering? Satellite data services. What are two big picture changes to the market in the last 5 years?

For one thing, everyone is on 4g now. It is very high bandwidth, capacity, priced well and reliable. This is true even in poorer countries - everyone in Vietnam had this service as well when I visited, for example. It is doubtful that a satellite could actually provide better data services than this. Similarly, fiber is spreading ever wider and offers a superior product for stationary uses.

The other big thing that changes is is the cost of a satellite launch has gone down significantly. This can be done by SpaceX now, according to wikipedia, for just $60m. Add to that rapidly improving technology - leaving the old fleet obsolete - and you have to wonder why you wouldn't want to invest in a satellite company that isn't billions of dollars underwater for new satellite ventures if there was actually a new opportunity.

The last thing to consider is that companies which provide satellite internet where it would actually be useful - in flights, on boats, oil rigs and in remote locations pretty much all lose money. VSAT just turned into the red the last two quarters. GOGO just tanks really hard. WIFI is about to drop off a cliff here after its 4x price run up on nothing but continued bad results.

This stock is the market's blackjack table. It could continue to be for a time. But the value of this "investment" is a mirage. If you're looking for a sound, long term investment be extremely wary of this one. I am honestly a little shocked it was allowed to have an IPO in the first place - the entirety of the IPO money raised was used to... pay down 3% of the company's debt. How did regulators even let this situation arise? Well... that is why you don't rely on regulators to protect people I suppose.
George Kesarios profile picture
However talking with several people, they told me that there were issues over the past 2-3 years. Again, have not followed it and do not know to what they were referring to.
emiliospot profile picture
Hi George I was wondering if you had any insight into Folli Follie situation ?
George Kesarios profile picture
No I do not. In fact I just got around to reading it yesterday (have not seen Greek financial news in a while).
Go, UOIP, makes those 13 willful infringed bad actors to pay you dearly.
Cost me $0.0035 a share, what is the price now? Up.
Still do not believe me?
When I mentioned UOIP, I knew you guys thought I was a fruit cake or a nut case right? I am very serious about investing, the lawsuit against those
13 US cable companies for infringement is going very well for UIOP. I started nibbling it at $0.0035 a share, if you still do not believe me, you can
check the share price today. When all the BS settles down, I will have more
than 1000% price appreciation by the end of this year.
So you turned 35k into 300k unrealized on a sub penny stock.

Care to screenshot the trade buy execution on $UOIP ?
Like I say, investing is an art, not science! Still do not believe me?
I predict today may be bad for Intelsat because all the negative noises. Thank God, it stands firmly.
Sold half of my position @$13, debating whether to sell the rest. The 5G game is on worldwide. I just can't figure the FCC shooting it down in the US as it's vital to stay competitive in the Telecom game. Instead of selling the other half, I'll probably average back in if/when the price drops below $9. At a minimum, I may become a buyout target.
A fine level-headed look at where this stock stands, George 😉
Anything involves the government, it is complicated and time consuming, look at it, the Fannie and Freddie mess, the treasure secretary said that the matter would be deal within the first 100
days. Now what happen? Intelsat will get its task done, just take a little bit longer. Not its fault. Intelsat CEO ought to be very careful what he is going to say in CC. Nowadays, shareholders or those lawyers can sue him for anything. Right? I still have couple thousand shares, I want to see the end game of this one.
Thanks, George. I do not disagree with you about the common. However, I will continue to hold my various Notes, including the 12.5% 22s. The long term for I is not limited to just 5G. Additionally, I has a history of refinancing its debt. Good luck to all. Again, many thanks to you George for all of your hard work.
Nice to hear from you. I only have two series of Intelsat bonds: 7.75% of 2021 and 8.125% of 2023. I cannot buy any 12.5% of 22 for it because of
144A rule, it sucks. My brokerage firm said that they could get this bond for
me but they had to " LOOK AROUND." I said it was too much hassle and forgot about it.
Dear George,
I booked in more than 1/4 million dollars. Thank you. I felt very good as I read your first article
this year. I used a small portion of the profit and bought a lot of a sub-penny, OTC issue about
14 days ago. As I read this contributor, Dr. Anthony Cataldo's (PhD in accounting and professor) articles and blogs, I also
felt good about this issue. UOIP. Please do not laugh, I am very bullish and very serious about it. I bought it at on average $0.0035 a share, it closed over 1 cent today. I have 10+million shares. May be you should take a look, hopefully all matters are going to resolve this calendar year. I plan to hold on this one once the good news hit the wire.
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