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.
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.
SudhanP.com 
My calculate of SATS’s intrinsic value is at $1.70. But I will not write off SATS yet. I will wait for another year or so and see what value can SFI bring to them.
Hi axt, u used DCF to calculate intrinsic value? SATS is still in my watchlist though. U are right to KIV the company. SFI might bring value to the company as they are handling catering for YOG and some army camps at the moment. I think SFI will grow in years to come.
Just out of interest, what discount factor did you use for your DCF?
Hi axt,
I used 5.4%.