Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Intelsat (I) Tanks In 2019: A Value Stock Or A Value Trap?

By Zacks Investment ResearchStock MarketsDec 24, 2019 02:33AM ET
Intelsat (I) Tanks In 2019: A Value Stock Or A Value Trap?
By Zacks Investment Research   |  Dec 24, 2019 02:33AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Shares of Intelsat S.A. (NYSE:I) have declined 68.1% so far (as of Dec 23, 2019), making it the worst performer within the Zacks Satellite and Communication industry. The decline was primarily triggered by the Federal Communications Commission’s (“FCC”) support for the purported move by the Congress to hold public auction for its C-band spectrum.

The Downfall Trigger

Intelsat, along with some other satellite providers, had decided to sell some of the airwaves in the 3.7 gigahertz-to-4.2 gigahertz area of spectrum – widely known as the C-band – in a private auction to raise cash and repay debt. The airwaves acquired over the years were mostly used by these firms to deliver videos to TV stations and were considered as surplus resources. Moreover, the coveted spectrum was much in demand by telecom carriers for the deployment of 5G networks and offered a huge opportunity to rake in large sums of money.

However, several U.S. senators introduced a bill titled the ‘5G Spectrum Act’ that mandated the public auctioning of the C-band to start no later than year-end 2020, and sharing at least half of the proceeds with the FCC. With the FCC chairman Ajit Pai publicly supporting this view, shares went on a tailspin as the companies were set to lose significant chunk of legitimate money.

Down But Not Out

Despite a dismal stock performance, Intelsat is focusing on five operational priorities which are likely to stabilize its core business, improve competitive position, return it to growth and optimize asset value. Firstly, the company aims to leverage all assets within its global network for maximum return. Intelsat further intends to scale its managed services across enterprise, maritime, business jet commercial and aeronautical government opportunities and build powerful distribution channels to amplify its direct marketing efforts.

Third, the company expects to lead the industry in seamless implementation of satellite-based telecommunications solutions with state-of-the-art infrastructure. Intelsat aims to invest in and develop standards-based terminals and ground hardware, innovative and software-defined technology, and participate in 3GPP and other broad telecom sector standards development.

In addition, it intends to maintain a disciplined stance on cash flow management and enhance productivity of its deployed capital. Last but not the least, the company expects to optimize its spectrum rights to maintain sector leadership and provide regulatory and operational guidance based on market experience.

Intelsat is transforming its business and sector by investing in and deploying state-of-the-art technologies that will change the type of applications it serve and increase its share of global demand for broadband connectivity. It intends to boost revenues by driving stability in its core business, employing a disciplined yield management approach, and emphasizing the development of strong distribution channels for its four primary customer sets of broadband, mobility, media and government. Intelsat believes that developing differentiated managed services and investing in related software- and standards-based technology will help enhance its relevance within the broader telecommunications landscape.

With such inherent growth potential, Intelsat is likely to script a turnaround in the near future and benefit investors in the long run.

Zacks Rank & Key Picks

Intelsat presently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include KT Corp. (NYSE:KT) , PLDT Inc. (NYSE:PHI) and Mobile TeleSystems PJSC (NYSE:MBT) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KT Corporation has a long-term earnings growth expectation of 11.5%.

PLDT is currently trading at a forward P/E of 8x.

Mobile TeleSystems has a long-term earnings growth expectation of 4.9%.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

KT Corporation (KT): Free Stock Analysis Report

PLDT Inc. (PHI): Free Stock Analysis Report

Intelsat S.A. (I): Free Stock Analysis Report

Mobile TeleSystems PJSC (MBT): Free Stock Analysis Report

Original post

Zacks Investment Research
Intelsat (I) Tanks In 2019: A Value Stock Or A Value Trap?

Related Articles

Tim Knight
Major U.S. Futures: Line Limits By Tim Knight - May 23, 2022 8

It would be easy to make an argument for either side at this point. For the bulls, one could argue that the market is deeply oversold and long overdue for a powerful counter-trend...

Intelsat (I) Tanks In 2019: A Value Stock Or A Value Trap?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email