The Speedcast (ASX:SDA) Share Price Is Up 40% In 2 Days

The Speedcast International Ltd (ASX: SDA) share price has gone up 40% over the past two days.

Speedcast International is a satellite services company with operations stretching from Brisbane around to Perth. Ships, mining companies, Government groups and other parties can use their services for communication.

Speedcast’s Soaring Share Price

Since the start of July 2019, the Speedcast share price is down almost 70% – even including the excellent share price recovery over the past couple of days.

At the start of July, the company updated the market about its earnings expectations. Underlying EBITDA (click here to learn what EBITDA means) guidance was downgraded due to weaker operating conditions, delays of Phase 2 of the NBN project, increased churn, technical difficulties and a lower contribution from Globecomm.

In the half year result Speedcast reported a statutory net loss of $175.5 million due to a $154.8 million from the impairment of goodwill relating to the performance of its non-Government operating segment.

Net debt also increased to $625 million for the period, up from $586 million at 31 December 2018.

However, the company is still expecting solid growth over the medium term from the Maritime segment with increased commercial shipping and in cruise where bandwidth needs continue to grow according to Speedcast.

Speedcast also expects the Government segment to grow with higher defence spending and revenue synergies from the Globecomm integration expected in 2020.

In the second half of FY19 the company is expecting cost savings, synergies and moderate organic growth with full year EBITDA guidance of $150 million to $160 million.

It seems the fall in share price has attracted a major investor. After the market had closed yesterday, Mitsubishi UFJ Financial was revealed to have taken a 5.46% stake, or 13 million shares.

For a large investor to take a stake like that, it takes a lot of buying and is a vote of confidence. Perhaps this is the bottom and Speedcast will recover somewhat? It’s hard to say, telecommunication shares have been punished recently. I’d rather buy shares of the reliable shares in the free report below instead.

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by entering your email below, we’ll email it to you.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by clicking the button below.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.