Inmarsat (ISAT)

[Wizard]

Following a relating from Credit Suisse and JP Morgan in the last 10 days (moved to neutral in both cases) ISAT shares can now be bought for less than at any time in the last three years. The yield quoted on Dividend Data is close to a 5 year high (weakness in the pound will also have contributed as their dividend is quoted in $US) at around 6.5%.

They have a good track record with a rising dividend since 2005 and a compound average annual increase of about 6.5%pa (source Dividend Data). Dividend cover is quoted at 1.23x and net gearing is 159%.

I'm tempted to add. Have I missed something?

Terry.

Moderator Message:
Convention here is that the name of the company be used with it's TIDM at least once at the beginning, so have modified the subject to show Inmarsat (I assume that is who we are talking about here? Raptor.

[StepOne]

There were some negative broker comments discussed in the FT Alphaville blog on Tuesday. Don't know how much notice we should take of them, but FYI anyway...

https://ftalphaville.ft.com/marketslive/2017-01-18/

About 2/3rds the way down.

StepOne

[Wizard]

I see the price has turned since I posted, guess somebody agrees it is an opportunity!

Terry.

[CommissarJones]

I'm tempted to add. Have I missed something?

Terry.

I made the following comment last month in a different thread: "As for ISAT, this stock rings alarm bells for me. 2011 was the most recent year in which free cash flow covered dividends paid, and net borrowings surged 74% in the five years through 2015. No thanks."

[Wizard]

Moderator Message:
Convention here is that the name of the company be used with it's TIDM at least once at the beginning, so have modified the subject to show Inmarsat (I assume that is who we are talking about here? Raptor.

Apologies, thanks for fixing will try and get it ight in future.

Terry.

[Wizard]

Deutsche have reiterated their buy rating with a target price of 1020p, but the shares are still heading south. Now at 617.5p.

Terry.

Disclosure: no holding, but seriously thinking about buying some.

[moorfield]

I'm tempted to add. Have I missed something?

ISAT is on my watch list too. Being a satellite flavoured business it would add some diversification in my telecoms holdings (currently only VOD). I was doing a bit more digging and looking at its dividend history this weekend, over the last 5 years it has paid 34.59, 30.90, 28.10, 28.60, 25.53, 22.95 pence. (I think - I had to convert from USD using their FX rates). Cash flow covered the last dividend, although I've not looked fully at the last 5 years yet, more digging needed there.

[fireblade909]

I think ISAT soon have an important role to play enabling wifi on commercial flights, particularly when the feature is commoditised rather than being a USP currently

[Wizard]

ISAT has a bumpy ride. Today's news is that UBS has slashed its share price target (now 550p) and re-rated the share to a sell, the main driver being that UBS now does not see previously forecast dividend increases coming through until cover has improved.

Terry.

[monabri]

How much is the average person prepared to pay for in flight internet? Is there a strong business case for this technology or will people be put off if it is too expensive?

[Cornytiv34]

I suggest that the success or failure of satellite launches could have an impact on future success. There was to be a launch on Space X but it is being switched. (I understand links cannot be posted by new contributors) Try a search for Inmarsat ISAT satellite launches 2017 and browse some links.

Mike