SES has been my biggest and currently is ex aequo biggest position in the portfolio (with leverage at 10% of my portfolio). The company is headquartered in Luxembourg, where I live, and operates in the Satellites business. Luxembourgish government is very active in that space, which is very important here.
Today, SES reported H1 earnings. The revenue is at EUR947.5M, down 1.5% (to me it’s a very small drop!). EBIDTA is at very healthy EUR 582M (-2.3%). Now, stop here. If you’ve had financial education, you’ll just stop reading and probably buy as much as you can. This is actually an EXTREMELY healthy EBIDTA margin! 61.4%. Another words, this company actually makes tons of money (vs some stocks in the tech sector in the US … $NSDQ100 being my fav index…- shorting with $SQQQ)
FY2020 revenue is expected to be around 1.9B. Again, very healthy. The mitigation measures (covid) are only costing 40-60M. Again, just stop and look at these figures. Take it in. These costs will actually be offset by their “Simplify and Amplify” saving plan. (Source: Bloomberg)
Now, I have been buying this company below 6 for a while now. I have built a big position and actually opened 3 leveraged positions recently too, based on the news of new projects being signed off. I know that not many people look at Europe, but that’s just ignorance IMHO. SES has just been sitting there looking amazing for months now. The company has 1.16B cash ;) (double the level of 2016). I just love the companies with nearly 90% Gross Margins and 60%+ EBIDTA.
That’s it for now. Again, it’s my 2nd biggest position (only to $INVP.L), so I think it says it all. Recent analysis from $GS set PT at 9.5, whereas Jefferies recommended 16 a month ago. I would put my PT at 9 in the near term and around 11.5 in 12M with possibility to go to 18 by EOY 2021.
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