SDA - SpeedCast International

[System]

SpeedCast International is a leading global network solutions provider, enabling critical communications on land and at sea.

Providing high-quality managed network services in over 60 countries, SpeedCast leverages the latest satellite technologies for the provisioning of reliable and efficient network services to key industries such as Cellular, Maritime, Oil & Gas, Mining, Government and more…

http://www.speedcast.com

 

[greggles]

SpeedCast International closed up 3.49% at $6.23 today to make a new 12 month high. They've almost doubled in price in the last 10 months. A solid little performer flying under the radar.

Here's a screenshot from their FY2017 Financial Results for those unfamiliar with them.

 

[So_Cynical]

A solid little performer flying under the radar.

They were flying under the radar in August when i added SDA to a watch list at $3.40 ~ didn't pull the trigger though, cant buy everything.

 

[peter2]

Wow, hammered today after half year report. Results seemed OK to me, other than a poor performance in energy platforms (oil rig services). Expanding business with another buy-out of complementary company. I'll be putting this on my reversal watch-list, but I expect there'll be a delay before I see a setup.

ps: I stop whinging about not buying the BO at 6.20 in July 18.

 

[McLovin]

My five second look. I've never heard of this company. Balance sheet already fairly stretched. They've announced a big acquisition that will be funded completely by yet more debt. Looks as though they've downgraded FY18 results.

Pushing out expected recovery in energy capex is a theme amongst these o&g service companies.

 

[bigdog]

Motley Fool provided writeup of todays actions
https://www.fool.com.au/2018/08/28/...-asxsda-shares-smashed-on-guidance-downgrade/

report includes:

Here’s how Speedcast performed compared to the prior corresponding period:

• Revenue grew 24% to US$304.9 million.
• Underlying EBITDA increased 14% to US$60.4 million.
• EBITDA margin narrowed by 180 basis points to 19.8%.
• Underlying NPATA grew 37% to US$21.1 million.
• Net debt increased to US$430 million.
• Fully franked interim dividend of 240 Australian cents.
• Outlook: Underlying FY 2018 EBITDA to be in the range of US$135 million to US$145 million.

Overall, I thought this was a solid first half performance from Speedcast with three out of its four divisions delivering robust growth compared to the prior corresponding period.

Outlook.

While the Energy division’s performance was disappointing, it was the company’s outlook that sent shareholders to the exits in a hurry today.
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Report did not address Speedcast to Acquire Globecomm for US$135 million. To be funded by more bank debt.

 

[McLovin]

One other thing, they're quoting "less than 5x EBITDA post synergies". By my calcs, "synergies" make up about 50% of the anticipated EBITDA. Hmm...

 

[aus_trader]

Phew, what a drop !
Yesterday it was NTC today it's SDA.

I wonder if there is a decisive capital shift away from wireless Telecom space by a large player. Maybe they are using the results reporting day as a means to dump so there is less likely chance they'd be exposed as the culprit due to an asx 'please explain' price enquiry.

 

[notting]

They confirmed in May they were comfortable with consensus estimates earnings before (EBITDA) of about $US155 million.
OH NO!!! But today it gave guidance of full-year EBITDA of between $135 million and $145 million, Hence Market meltdown!!
Loss of confidence in management honesty possibly the big dipper as well as big disappointment in first-half earnings which are 17 per cent down from energy customers due to fewer off-shore oil rigs and delays in oil projects.
It's now an undervalued high growth stock
Worth the turn around play especially given oil is looking better in the last 6 months!!

 

[aus_trader]

They confirmed in May they were comfortable with consensus estimates earnings before (EBITDA) of about $US155 million.
OH NO!!! But today it gave guidance of full-year EBITDA of between $135 million and $145 million, Hence Market meltdown!!
Loss of confidence in management honesty possibly the big dipper as well as big disappointment in first-half earnings which are 17 per cent down from energy customers due to fewer off-shore oil rigs and delays in oil projects.
It's now an undervalued high growth stock
Worth the turn around play especially given oil is looking better in the last 6 months!!

Yes, interesting that results have not been far off and certainly not in negative territory.
But the current theme seems to be anything short seems to be kicked in the nuts...

Another one I saw today was Axsesstoday Ltd (AXL). Looks like a beautiful result on paper but two days of heavy falls in SP !

 

[bigdog]

The Speedcast International Ltd (ASX: SDA) share price has rebounded almost 6% higher to $4.20.

News that three of the company’s directors have been buying shares on-market over the last 24 hours appears to have been the driver of this gain. Prior to today Speedcast’s shares were down over 40% this week after its shares were sold off due to management cutting its full year guidance.

 

[tinhat]

I'm seeing value opportunities opening up all over the place this reporting season. I've picked up some ECX, IRI and CL1 recently and today I bought some SDA @ $4.20. Alas, I have broken my rule once more on not catching falling knives! I would not be surprised if it got back down under $4 and if it does I will wait for a confirmation that the bottom is in on the chart and buy some more.

I'm not surprised the market punished them missing their guidance. This is a highly leveraged company with a large debt burden. I understand management expects debt/EBITDA to reach 3.3x this financial year. Using debt to fund growth through acquisition always carries considerable execution risk.

 

[bigdog]

The share price has increase $0.22 today at 11:30 AM

The share price crashed on 28-08-2018 after half yearly report issued
28/08/2018 close 4.200 volume 26,096,525
27/08/2018 close 6.710 volume 918,242

Speedcast International ((SDA)) is being punished severely by the market after delivering a downgrade to 2018 earnings estimates, as price pressures remain evident across the satellite services industry. The main driver of weakness was the energy division as an expected turnaround did not materialise.

Macquarie notes a material deterioration in market conditions, given the company stated a year ago that it expected an upswing in 12-18 months. The broker remains cautious, given the high hurdles for offshore developments.

The only news today was

SDA 27/09/2018 8:25:39 AM Incremental Term Loan Pricing Announcement

Speedcast International Limited Announces Pricing of $175 million Incremental Term Loan

Sydney, Australia, 27 September 2018 – Speedcast International Limited (ASX: SDA) (“Speedcast”), the world’s most trusted provider of remote communication and IT solutions, today announced it has successfully priced the US$175 million incremental term loan add-on (the “Incremental Term Loan”) to its existing US$425 million US Term Loan B facility (due 2025) (the “Existing Term Loan”). The Incremental Term Loan and the Existing Term Loan will have the same terms, including interest margin, and will be priced at LIBOR plus 2.75% p.a., which is a 0.25% p.a. increase on the current interest margin under the Existing Term Loan.


On 20/09/2018 5:16:42 PM there was ASX announcement "Change in substantial holding"

UBS Group AG and its related bodies corporate increased there shareholding which could be encouraging

 

[Miner]

SDA followers
How this is looking now after dust settled ?
Still high PE but relatively much lower than other peers.
DNH
https://www.asx.com.au/asx/share-price-research/company/SDA

 

[bigdog]

The best performer on the ASX 200 on Tuesday has been the Speedcast International Ltd (ASX: SDA) share price which is up 4.5% on the back of no news.


Currently:

 

[bigdog]

Reason for big drop is ASX announcement today


2/07/2019 9:06:47 AM Speedcast updates expectations for 1H2019 and FY2019
https://www.asx.com.au/asxpdf/20190702/pdf/4469cg4jflvnlp.pdf

Motley reports
https://www.fool.com.au/2019/07/02/speedcast-shares-sunk-by-profit-downgrade/

Speedcast shares sunk by profit downgrade
Tom Richardson | July 2, 2019

The Speedcast International Ltd (ASX: SDA) share price could tumble today after the satellite communications business told investors it now expects adjusted calendar year 2019 EBITDA in the region of US$140 million to US$150 million, compared to prior guidance between $160 million to $171 million.

The company also warned it expects first half 2019 adjusted EBITDA to hit between US$60 million to US$64 million, which means it will need to deliver a far stronger second half to the year to even meet its downgraded guidance.

The company blamed the result on “evolving market conditions” and more “recent commercial developments”. Specifically it blamed delays in NBN revenues, weak market conditions in enterprise and emerging markets (EEM), and “technical difficulties causing further delays in the ramp up of the Carnival contract”.

Speedcast joins a group of tech oriented companies in the naughty corner after delivering earnings downgrades this week, with others including dark fibre business Superloop Ltd (ASX: SLC) and software business Adacel Technologies Ltd (ASX: ADA).

 

[bigdog]

Motley reports
https://www.fool.com.au/2019/07/04/the-embarrassing-bounce-in-the-speedcast-share-price/

The embarrassing bounce in the Speedcast share price
Brendon Lau | July 4, 2019

The embattled Speedcast International Ltd (ASX: SDA) share price is staging a remarkable turnaround today that is likely to earn the company a speeding ticket from the share market operator ASX Ltd (ASX: ASX).

The Speedcast share price surged 10% to $1.89 and is the best performer on the S&P/ASX 200 ) on Thursday

There is no new ASX announcement from Speedcast to explain sharp turnaround after the stock suffered huge losses in the previous two days that was triggered by a profit downgrade.

The good news Speedcast forgot to tell the ASX

The interesting thing is that the downgrade was released to the ASX but today’s share price resurrection on the back of a US contract win was not!

However, management thought it fit to issue a press release on the contract win instead and posted it on the Speedcast website. Whoever’s responsible for the satellite services group’s investor relations should be taken out back.

The press release explained that Speedcast’s subsidiary, Speedcast Government, is one of multiple parties that was awarded a US$3 billion five-year contract with the U.S. Department of Homeland Security (DHS).

“Speedcast Government is honoured to have been selected as an awardee under the TacCom II vehicle. We are committed to bringing leading-edge technologies, equipment, network and technical services to support DHS and its end users on this important program,” said Moe Abutaleb, CEO of Speedcast Government.

Why a US$3 billion win may not be so exciting

There’re no details on what slice of the US$3 billion pie Speedcast was awarded and maybe the amount is immaterial – hence the company’s decision not to issue an ASX announcement.

Either way, it’s a bad look for Speedcast, which on Tuesday cut its full year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) guidance to between US$140 million and US$150 million from its earlier forecast of US$160 million to US$171 million.

The downgrade was due in part to weaker than expected performance from its recently acquired Globecomm business and poor performance from the commercial maritime and Enterprise and Emerging Markets (EEM) markets.

The good news is that there are better opportunities on the ASX for FY20. The experts at the Motley Fool believe that this outperforming stock will continue to charge ahead over the coming year – if not longer.

 

[Miner]

Good morning All
SDA after a good bounce on 4 July (a dead cat bounce ??) provided a disclosure today about its wining of US contract. Still they have not told what percentage or what value of contract out of US $3 B they have won. Market will now smell rotten fish and unfortunately for the holders, will punish this morning (probably)
https://www.asx.com.au/asx/share-price-research/company/SDA
https://www.asx.com.au/asxpdf/20190705/pdf/446dk2qq2k874m.pdf

Goldman took the opportunity to be a substantial holder by entering into buy scenario on 2nd July .
https://www.asx.com.au/asxpdf/20190705/pdf/446dk6g8zchtvw.pdf. They probably did not realise after 40% slump, SDA will go down another 16% on next day 3 July. It could be they would have bought into again on 3 July. We will learn that only on Monday 8 July announcement .
So at the moment Goldman is a looser on a short term basis unless market picks up today again (unlikely) .
My guess, is Goldman will just exit for a profit very soon.
https://www.asx.com.au/asxpdf/20190704/pdf/446d7q9pfx8nr7.pdf (IFL bought into - short term opportunity like Goldman) ?
https://www.asx.com.au/asxpdf/20190704/pdf/446cwhfgxdpjbf.pdf (Indus is a US investor so why they sold out ??)
https://www.asx.com.au/asxpdf/20190704/pdf/446cwhfgxdpjbf.pdf
Challenger sold out on 2nd July itself https://www.asx.com.au/asxpdf/20190704/pdf/446d99hyj3qm1x.pdf (Panic sale)

04/07/2019 1.890 9.884% 1.965 1.665 25,200,112
03/07/2019 1.720 -16.505% 2.050 1.720 25,371,589
02/07/2019 2.060 -40.805% 2.400 2.040 25,572,112
01/07/2019 3.480 0% 3.635 3.480 682,232
28/06/2019 3.480 3.571% 3.530 3.395 1,005,138

 

[Miner]

As predicted IFL bought more to increase its holding on 3rd July by another 2% of the total stock, when SDA had another deep.
Please do not question if they are any different than Joe Blog in the market or prudent researcher to put money. It is not their money any way .
What they would have today, with after a little hike, SDA dipped down by another 4% ?
https://www.asx.com.au/asxpdf/20190705/pdf/446f8ft44q0qc0.pdf

 

[Miner]

How interesting SDA performance. Sorry, but could not see any news or update but volume of transaction is more than 10 millions with more than 8% fall. SDA has fallen more often than rose. Whats wrong with this company ? It appointed an investor relation expert whom market did not like or what ?
https://www.asx.com.au/asx/share-price-research/company/SDA
https://www.asx.com.au/asxpdf/20190726/pdf/446wx4vjnlmvzm.pdf