Nitin Sacheti of Papyrus Capital presented his in-depth investment thesis on EchoStar (Nasdaq: SATS) at Best Ideas 2018.
EchoStar is an underfollowed satellite business run by a smart owner/manager (Charlie Ergen) with three core businesses, trading at 10x 2019E cash P/E and worth $88 per share, offering ~53% upside and three additional hidden options worth $93 per share, or $181 per share in total (~213% upside). SATS owns valuable intellectual property in their Ka-band high throughput satellites, which they can build at one-tenth the cost per bit of other satellites. While the product has, so far, generated IRRs in the high-20% in its first application (rural consumer broadband), 5G offers many more uses for the satellite IP, which means the company will likely launch JVs across the world or acquire a business with worldwide distribution, into which Echostar will plug its IP and generate significant value. Nitin believes the company will realize its intrinsic value over the next two to three years as 5G standards take effect.
About the instructor:
Nitin Sacheti is the Founder and Portfolio Manager of Papyrus, where he continues to implement a successful bottoms-up investment process, honed over 10 years, focusing on free cash flow generation over time. Prior to founding Papyrus, Mr. Sacheti was a Senior Analyst/Principal with Equity Contribution at Charter Bridge Capital where he managed the firm’s investments in the technology, media and telecom sectors as well as select consumer investments. At Charter Bridge and in his prior role at Cobalt Capital, he managed over 25 names in a ‘mini-PM’ capacity with significant autonomy ensuring a seamless transition to Portfolio Manager at Papyrus. Previously, Mr. Sacheti was a Senior Analyst at Tiger Europe Management, managing mostly the fund’s non-European investments. Mr. Sacheti began his investment career in 2006 at Ampere Capital Management, a consumer, media, telecom and technology focused investment firm, initially as a Junior Analyst, later becoming Assistant Portfolio Manager. He graduated from the University of Chicago with a BA in Economics and was a visiting undergraduate student in Economics at Harvard University.
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