Opinions The Panic-Proof Portfolio (Stockchase Research)
TelesatTSAT.TOPAST TOP PICKApr 02, 2024
Stock price when the opinion was issued
As of Jun 02, 2026. Market Open.
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On paper, TSATs fundamentals are showing a decline, with revenues and margins falling, but yet the stock price is rising. This is due to an internal shift in its business model. Its legacy business is its geostationary satellites (GEO) which provide services like broadcasting, enterprise telecom, etc. This segment is in a structural decline, but its new segment low-earth-orbit satellites (LEO) is seeing strong demand from governments, and its backlog is growing. So while its GEO segment is in a structural decline, the backlog growth for LEO is expected to offset the decline in GEO in the coming year(s). We think it is interesting and has potential being in the space exploration sector.
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On paper, TSATs fundamentals are showing a decline, with revenues and margins falling, but yet the stock price is rising. This is due to an internal shift in its business model. Its legacy business is its geostationary satellites (GEO) which provide services like broadcasting, enterprise telecom, etc. This segment is in a structural decline, but its new segment low-earth-orbit satellites (LEO) is seeing strong demand from governments, and its backlog is growing. So while its GEO segment is in a structural decline, the backlog growth for LEO is expected to offset the decline in GEO in the coming year(s). We think it is interesting and has potential being in the space exploration sector.
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We like the sector, and the stock is cheap. We would be OK buying.
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Premium contentThis Canadian based satellite operator provides services to direct-to-home broadcasters, government agencies and the oil and gas sector. The company just announced an expanded contract with the Department of Defense. It trades under 2x earnings, under book value and supports a 30% ROE. We recommend placing a stop-loss at $11, looking to achieve $17 -- upside potential of 18%. Yield 0%
Our PAST TOP PICK with TSAT has triggered its stop at $11. To remain disciplined, we recommend covering the position at this time.