The revenue and cashflow for SATS are extremely inconsistent. These in itself will kick SATS out, as it doesn’t fulfill the value investing criteria. Since revenue and cashflow are unpredictable, it is difficult to project the future cashflows to find a proper intrinsic value. However, I managed to obtain a ballpark figure for intrinsic value at $1.80. This means that SATS is grossly overvalued currently, in my opinion. Even if SATS drops below $1.80, I would not touch it due to the sole reason that it has inconsistent numbers.
I did an analysis on Singapore Airport Terminal Services (SATS) last weekend. Even though SATS has a huge moat, their financial numbers are dismal. Comparing SATS with Thomson Medical, TMC wins hands down. A possible reason for this might be that SATS is a very mature company that there isn’t much growth left.