Inmarsat - ISAT Stream Log

@ paul1945: what's the point in selling now? Seems to me to be just locking in losses... also, how will you know when to get back in? You could miss a leap upwards and compound your aggregate loss in so doing, over the long term.

Bought at 399 to average down to 480p ... will be holding for the long haul ...

Short interest in ISAT is down from 8.29% at the end of Nov to about 4.61% as of yesterday. It suggests the falls that happened in the SP have rewarded the short sellers sufficiently at this stage, the motivation for shorting probably in anticipation of a dividend cut. However, the shares reacted before the event leading to the ridiculous yield of 9% etc. In any event, it looks like the shortsellers packed up their stalls and have started to move on to some other target. At the remaining yield of almost 4% dramatic further drops in SP seem unlikely so could see more short covering now and the SP gradually appreciate a bit and find a medium term level in the absence of any significant news. Agree with Boyobach that it doesn't reflect very well on mgmt that they didn't "see this coming" and continued with a disproportionate interim div. but better late than never.

Good decision to cut the dividend even if it will cost me a few quid in the short term. The in-flight wifi opportunity is huge and there are significant barriers to entry so if it can get a solid foothold in that by investing more now I'm all for it. It'll still be yielding close to 4% if the stays around here which is fair compensation for having to have patience. It's encouraging to see them talking about hiring people with new technology skills also - if they are going to be leaders in the IOT/M2M they will need talented engineers who are in ever-increasing demand but ISAT has a lot of advantages if it can get the right personnel.

I wouldn't give a toss about Deutsche Bank selling down a big chunk of ISAT - they're probably being forced into divesting assets to try and sort out their small matter of a couple of hundred billion - yes, billion - of debt they have (include a few hundred million to one Donald J. Trump...)

@ascatix - yeah, I think people are underestimating the market for in-flight wifi - I think it's a massive opportunity to be exploited. Airlines are increasingly looking to ancillaries for revenue and selling the base seat cheap so it plays into this aswell provided ISAT has a good chunk of the wedge. There are barriers to entry for new aspiring providers of in-flight wifi also. I'm sticking with ISAT despite being down about 10% currently on average purchase price... GLA

Many people consider the Altman Z-score less relevant nowadays as it's based on an outdated sample of much smaller companies relative to today. Still, it may provide another data point to consider. However, the retained earnings has a powerful effect on the z-score and in ISAT's case increasing it by between 100m and 200m brings the z-score into the 'grey zone' which is inconclusive regarding likelihood of bankruptcy. And of course, a quick and simple, albeit painful, way to increase retained earnings is to slash the dividend by a similar amount. This would wipe the dividend more or less completely which they prob. won't want to do, but a cut of ca. 50% seems unavoidable soon.

HSBC downgrade [link]

The dividend might be one of the issues...i.e. it's currently not covered by profits @ 115% of same and this is projected to increase to 145% by 2021 according to Simply Wall St. analysis so it's reasonable to guess that it may be cut by between 25% and 40% leaving it much less enticing than its current yield. It would be more within the normal range of an income share trading at ca. £4 though....I hope I am wrong and this can move back up to closer to its value which is above £8 based on discounted cashflow method, again from Simply Wall St...

Article mentioning in-flight wifi initiative: [link]