Unlock: Echostar (SATS) – Still Waiting for Jupiter 3 After Sweet +22% Gain
It pays to do fundamental research. Here is bullish view we presented to clients on September 26 with stock at $41.22. Now at $50.15, up +21.6% in 6 weeks. To learn more about our approach and how you can become a successful trader, sign up for 2 week trial and test drive live chat room with some of the best traders: SUBSCRIBE
September 26, 2016
Echostar (SATS) – On average day stock trades only 9 contracts. Total open interest is only 216 in option chain. Implied volatility is rising by +4.7% with some unusual action:
– Buyer of 153 January 40 calls for $3.40 offer
– Buyer of 330 April 40 calls for $4.50 offer
Overall approx $201,000 call premium bought. SATS is $3.8 billion communication and networking company. The Company’s EchoStar Technologies segment provides end-to-end video and broadcast technology products and services to businesses and directly to consumers. It provides satellite services on a full-time and occasional-use basis to DISH Network, Dish Mexico, the United States Government service providers, Internet service providers, broadcast news organizations, programmers and private enterprise customers. Highlights from prior quarter as reported on August 9:
– Q2 EPS $0.60 vs. $0.43 estimate, big beat
– Q2 Revenues $757M vs. $766M estimate, miss
Catalyst – Back in February, SATS subsidiary called Hughes launched Jupiter-2 and stock jumped sharply from $38 to $46. Since then company continues to expand its program adding customers. While Jupiter-2 continues to expand its reach by signing with new partners such as major deal with Airbus Defense and Space on September 13, the real catalyst here might be Jupiter-3 announcement that Macquarie analyst believes could be imminent any day now that the largest FSS providers in both Europe and the US have announced plans for Very High Throughput Satellites (VHTS). This is not in any consensus model but here is a comment from CEO:
“We are working very hard on Jupiter 3 and we are talking to satellite manufacturing vendors. I think in the next few months we will have some announcements hopefully to make on that.”
More on this and calendar full of satellite launches HERE.
