Up 400% So Far in 2018, Is Intelsat for Real?

Shares of satellite communications company Intelsat (NYSE:I) are up over 400% so far in 2018. Positive press and speculation have fueled the dramatic increase, and at least one analyst is calling for even more upside. However, investors hoping for more return should be aware of the big risk they are taking in owning this company.

What happened?

The hubbub got started early this year when the Luxembourg-based communications outfit reported its full-year 2017 results. Along with those results, the company said it won a contract to expand 4G LTE mobile services in rural America and that a proposal was made to the Federal Communications Commission to use Intelsat's satellites to speed up the deployment of the fast-approaching 5G wireless network.

When you add in an upgrade from RBC Capital Markets�, as well as a sensational call from small analyst Kerrisdale Capital for the sub-$20 stock to jump to $150, traders had all the ingredients they needed to land a jackpot. By the way, under all of that news is the fact that Intelsat is running at a steep loss and sales growth has been weak at best. Revenue fell 1.8% in 2017 and 3.7% in the first quarter of 2018 when excluding a $25 million benefit from new revenue recognition standards. Losses per share were $1.50 and $0.56 in 2017 and first-quarter 2018, respectively.

Data by YCharts.

The $14 billion elephant in the room

The upshot here for investors is that Intelsat may have a few irons in the fire to get revenue and cash flow back into growth mode. The company's biggest customers are communications networks, media companies, and government services, all of which have new needs that Intelsat's satellites help meet. However, the big concern is on the balance sheet. Intelsat is bogged down with long-term debt, to the tune of $14.1 billion as of the end of the first quarter. To put that in perspective, Intelsat's current market cap is only $2.4 billion and cash and equivalents on hand are only $492 million.

Juggling that debt by refinancing when it comes due has been the name of the game, but servicing it is becoming more costly. Interest expense in the last reported period was $282 million compared with $246 million a year ago. Both figures gobbled up more than profits from operations. For full-year 2017, interest expense was $1.02 billion and was the biggest reason the company posted a red bottom line.

Image source: Getty Images.

In fact, it was for this reason that Intelsat shares traded for a mere $2 and change before exploding higher earlier this year. Granted, the company has plenty of assets it could monetize to wean itself off lenders, and with the prospect of new wireless networks providing a spark to generate growth, Intelsat's heavy burden could get a little lighter soon.

For investors attracted to the triple-digit marquee return this year, though, it could be as good as it gets for the stock. Unchecked borrowing is still easily outstripping operating margins, and without confirmation that new revenue sources are for certain, losses likely aren't going to swing to profits anytime soon.

Yamana Gold (YRI) Hits New 12-Month Low at $3.58

Shares of Yamana Gold Inc. (TSE:YRI) (NYSE:AUY) reached a new 52-week low on Thursday . The company traded as low as C$3.58 and last traded at C$3.61, with a volume of 2262499 shares changing hands. The stock had previously closed at C$3.74.

A number of equities analysts have issued reports on YRI shares. National Bank Financial upgraded Yamana Gold from a “sector perform” rating to an “outperform” rating and cut their price target for the stock from C$6.00 to C$5.75 in a report on Tuesday, April 10th. Canaccord Genuity cut their price target on Yamana Gold from C$6.00 to C$5.75 in a report on Monday, May 28th.

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Yamana Gold (TSE:YRI) (NYSE:AUY) last posted its quarterly earnings results on Wednesday, May 2nd. The company reported C$0.01 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of C$0.01. The firm had revenue of C$568.48 million for the quarter. Yamana Gold had a negative return on equity of 17.87% and a negative net margin of 41.69%.

The firm also recently declared a quarterly dividend, which was paid on Friday, July 13th. Shareholders of record on Friday, June 29th were issued a dividend of $0.006 per share. This represents a $0.02 dividend on an annualized basis and a dividend yield of 0.65%. The ex-dividend date was Thursday, June 28th.

About Yamana Gold

Yamana Gold Inc operates as a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile, and Argentina. It primarily sells precious metals, including gold, silver, and copper. The company was formerly known as Yamana Resources Inc and changed its name to Yamana Gold Inc in July 2003.

Further Reading: Are Wall Street analysts’ stock ratings worth following?

Brokerages Anticipate Centurylink Inc (CTL) to Post $0.23 EPS

Wall Street analysts expect that Centurylink Inc (NYSE:CTL) will announce earnings per share of $0.23 for the current fiscal quarter, Zacks reports. Six analysts have provided estimates for Centurylink’s earnings, with the highest EPS estimate coming in at $0.28 and the lowest estimate coming in at $0.18. Centurylink reported earnings of $0.46 per share during the same quarter last year, which indicates a negative year over year growth rate of 50%. The firm is expected to issue its next quarterly earnings results after the market closes on Wednesday, August 8th.

On average, analysts expect that Centurylink will report full year earnings of $0.93 per share for the current fiscal year, with EPS estimates ranging from $0.84 to $1.00. For the next financial year, analysts forecast that the business will report earnings of $1.06 per share, with EPS estimates ranging from $0.82 to $1.45. Zacks’ earnings per share averages are an average based on a survey of sell-side research firms that that provide coverage for Centurylink.

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Centurylink (NYSE:CTL) last released its earnings results on Wednesday, May 9th. The technology company reported $0.25 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.19 by $0.06. The firm had revenue of $5.95 billion during the quarter, compared to analyst estimates of $5.97 billion. Centurylink had a return on equity of 4.94% and a net margin of 6.92%. The business’s quarterly revenue was up 41.2% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.35 earnings per share.

Several equities research analysts have commented on the company. TheStreet upgraded Centurylink from a “c+” rating to a “b” rating in a research note on Friday, July 6th. Bank of America restated a “buy” rating and set a $27.00 price target on shares of Centurylink in a research note on Wednesday, May 16th. Macquarie lowered Centurylink from a “neutral” rating to an “underperform” rating and dropped their price target for the stock from $27.61 to $18.00 in a research note on Wednesday, May 16th. Jefferies Financial Group upgraded Centurylink from a “hold” rating to a “buy” rating in a research note on Tuesday, June 26th. Finally, ValuEngine lowered Centurylink from a “buy” rating to a “hold” rating in a research note on Wednesday, May 2nd. Two investment analysts have rated the stock with a sell rating, eight have assigned a hold rating and seven have given a buy rating to the company’s stock. The stock currently has an average rating of “Hold” and an average price target of $21.00.

In related news, Director Steven T. Clontz bought 41,000 shares of the stock in a transaction dated Friday, May 11th. The stock was acquired at an average price of $19.44 per share, for a total transaction of $797,040.00. Following the completion of the purchase, the director now owns 162,019 shares in the company, valued at $3,149,649.36. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. 0.60% of the stock is currently owned by company insiders.

Several hedge funds have recently bought and sold shares of CTL. Ballew Advisors Inc acquired a new stake in shares of Centurylink in the first quarter valued at about $101,000. Archford Capital Strategies LLC acquired a new stake in shares of Centurylink in the first quarter valued at about $130,000. Bedel Financial Consulting Inc. acquired a new stake in shares of Centurylink in the first quarter valued at about $136,000. Private Capital Group LLC grew its stake in shares of Centurylink by 295.1% in the first quarter. Private Capital Group LLC now owns 8,783 shares of the technology company’s stock valued at $144,000 after buying an additional 6,560 shares in the last quarter. Finally, Fairfield Bush & CO. acquired a new stake in shares of Centurylink in the first quarter valued at about $150,000. Institutional investors and hedge funds own 78.46% of the company’s stock.

Centurylink stock traded down $0.05 during trading on Friday, hitting $19.58. The company’s stock had a trading volume of 76,562 shares, compared to its average volume of 6,433,678. The firm has a market capitalization of $21.16 billion, a P/E ratio of 13.35, a PEG ratio of -14.08 and a beta of 0.79. Centurylink has a 1-year low of $13.16 and a 1-year high of $23.78. The company has a current ratio of 0.88, a quick ratio of 0.88 and a debt-to-equity ratio of 1.58.

Centurylink Company Profile

CenturyLink, Inc provides various communications services to residential, business, wholesale, and governmental customers primarily in the United States. It operates in two segments, Business and Consumer. The company offers virtual private network data network services; Ethernet services; Internet protocol services; CenturyLink Prism TV that allows customers to watch television or cable channels and record up to four shows on one home digital video recorder; and Vyvx, which provides audio and video feeds over fiber or satellite for broadcast and production customers, as well as satellite digital television services.

Further Reading: Book Value Of Equity Per Share �� BVPS Explained

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Lawsuit: Black farmers were sold 'fake' seeds

Black farmers, whose numbers already have dwindled precipitously over the past century, face new hardships�after suffering�poor yields�last year, because they were�sold "fake" soybean seeds marketed at a Memphis trade show, members of a group representing African-American growers said Tuesday.

Leaders of�the Memphis-based Black Farmers and Agriculturalists Association have�filed a class-action lawsuit against Stine Seed Co., the nation's largest independent seed-producer, accusing the Adel, Iowa, firm of targeting African-Americans for sales of defective seeds.

The suit alleges that black farmers who attended the 67th Annual Mid-South Farm & Gin Show at the Memphis Cook Convention Center in March of last year bought more than $100,000 worth of�Stine�seeds. But the "certified" seeds the growers had paid for were switched with inferior ones at a warehouse near Sledge, Miss., according to the suit.

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Stine, in a statement issued Tuesday night, strongly denied the allegations and said it would mount a vigorous defense against the "meritless" lawsuit.

The lawsuit is the latest action by the BFAA, which also has represented some of the African-American�farmers claiming widespread discriminatory practices against�by the U.S. Department of Agriculture.

Following an initial class-action lawsuit against USDA,�nearly 16,000 growers had collected settlements totaling $1.06 billion by 2011. Congress has appropriated $1.2 billion to pay for a second wave of settlements.

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Winter wheat is harvested in a field farmed by Dalton and Carson North near McCracken, Kan. Kansas farmers are harvesting a smaller winter wheat crop amid an ongoing drought.  CHARLIE RIEDEL, APFullscreen Winter wheat stands ready to by harvested in a field near McCracken, Kan. The government forecast U.S. winter wheat production at nearly 1.2 billion bushels, down 6 percent from last year.   CHARLIE RIEDEL, APFullscreen Winter wheat is harvested in a field near McCracken, Kan. Kansas is the nation's leading wheat producer with a forecast of 270 million bushels, down 19 percent compared to a year ago. Kansas is expected to harvest 7.3 million acres of wheat.   CHARLIE RIEDEL, APFullscreen Winter wheat is harvested in a field near McCracken, Kan.   CHARLIE RIEDEL, APFullscreen Winter wheat is harvested in a field near McCracken, Kan.   CHARLIE RIEDEL, APFullscreen Winter wheat is harvested in a field near McCracken, Kan.   CHARLIE RIEDEL, APFullscreen Winter wheat stands ready to by harvested in a field near McCracken, Kan.  CHARLIE RIEDEL, APFullscreen Winter wheat stands ready to by harvested in a field near McCracken, Kan.  CHARLIE RIEDEL, APFullscreen Winter wheat stands ready to by harvested in a field near McCracken, Kan.  CHARLIE RIEDEL, APFullscreen Winter wheat stands ready to by harvested in a field near McCracken, Kan.  CHARLIE RIEDEL, APFullscreen Winter wheat is harvested in a field near McCracken, Kan.   CHARLIE RIEDEL, APFullscreenInterested in this topic? You may also want to view these photo galleries:Replay1 of 112 of 113 of 114 of 115 of 116 of 117 of 118 of 119 of 1110 of 1111 of 11AutoplayShow ThumbnailsShow CaptionsLast SlideNext Slide

BFAA president Thomas Burrell said at a news conference Tuesday that the number of black farmers has dropped from nearly 1 million in 1920 to about 5,000 today largely as a result of "systemic racism." The�low yields resulting from the�"fake" seeds could�drive more minority growers out of business, he said.��

"The few remaining black farmers, who have survived drought, who have survived tariffs, who have survived all kinds of natural disasters... are now finding themselves having to deal with the government of systemic racism by not only the Department of Agriculture, but now seed-manufacturers, seed-breeders, chemical manufacturers who now are weaponizing and have weaponized their seeds," Burrell said.

Farmers using the seeds reported yields that were only half�those from other varieties, according to the suit. At the news conference, BFAA officials distributed laboratory results from Mississippi State University showing that none of the farmers' seeds that had been submitted for testing germinated.

"Upon learning of these claims, the company took swift action to conduct an internal investigation, which has not revealed any evidence that would support these allegations," Stine president Myron Stine said in a statement.�"Our focus is on continuing to serve all our customers with the highest degree of integrity and respect that are the bedrock of our company��s values.��

He said the company has filed a motion to dismiss the lawsuit.

CLOSE

The U.S. hiked tariffs on Chinese imports Friday. Beijing has said it would be forced to counterattack. China could put higher tariffs on a number of U.S. goods including soybeans, whiskey and pork. That has pork farmers worried. (July 6) AP

�

SS&C Technologies Holdings, Inc. (SSNC) Receives $58.44 Consensus PT from Analysts

SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) has been assigned a consensus recommendation of “Buy” from the fifteen brokerages that are presently covering the firm, Marketbeat reports. Three equities research analysts have rated the stock with a hold rating, ten have assigned a buy rating and two have issued a strong buy rating on the company. The average 1-year price target among analysts that have issued a report on the stock in the last year is $58.44.

Several research analysts have commented on the stock. BidaskClub upgraded shares of SS&C Technologies from a “buy” rating to a “strong-buy” rating in a report on Thursday, June 21st. Zacks Investment Research cut shares of SS&C Technologies from a “buy” rating to a “hold” rating in a report on Tuesday, June 19th. JPMorgan Chase & Co. assumed coverage on shares of SS&C Technologies in a report on Tuesday, May 1st. They set an “overweight” rating and a $60.00 price target for the company. Credit Suisse Group assumed coverage on shares of SS&C Technologies in a report on Thursday, May 31st. They set an “outperform” rating and a $60.00 price target for the company. Finally, Citigroup assumed coverage on shares of SS&C Technologies in a report on Tuesday, June 12th. They set a “buy” rating and a $62.00 price target for the company.

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Shares of SS&C Technologies opened at $53.02 on Tuesday, according to Marketbeat. SS&C Technologies has a one year low of $36.48 and a one year high of $55.25. The stock has a market capitalization of $12.51 billion, a price-to-earnings ratio of 29.62, a PEG ratio of 1.80 and a beta of 1.18. The company has a quick ratio of 1.03, a current ratio of 1.03 and a debt-to-equity ratio of 0.69.

SS&C Technologies (NASDAQ:SSNC) last announced its earnings results on Tuesday, May 1st. The technology company reported $0.53 EPS for the quarter, missing the consensus estimate of $0.54 by ($0.01). SS&C Technologies had a return on equity of 15.43% and a net margin of 19.65%. The firm had revenue of $434.60 million during the quarter, compared to analyst estimates of $433.77 million. During the same quarter in the previous year, the business earned $0.44 earnings per share. The business’s quarterly revenue was up 6.1% compared to the same quarter last year. analysts anticipate that SS&C Technologies will post 2.16 earnings per share for the current fiscal year.

The business also recently declared a quarterly dividend, which was paid on Friday, June 15th. Investors of record on Friday, June 1st were issued a dividend of $0.07 per share. This represents a $0.28 annualized dividend and a dividend yield of 0.53%. The ex-dividend date of this dividend was Thursday, May 31st. SS&C Technologies’s dividend payout ratio is currently 15.64%.

In other SS&C Technologies news, SVP Paul Gerard Igoe sold 112,000 shares of SS&C Technologies stock in a transaction that occurred on Friday, May 4th. The shares were sold at an average price of $48.17, for a total value of $5,395,040.00. Following the completion of the sale, the senior vice president now directly owns 112,000 shares in the company, valued at $5,395,040. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Jonathan E. Michael bought 12,543 shares of SS&C Technologies stock in a transaction on Friday, May 11th. The stock was acquired at an average price of $49.10 per share, with a total value of $615,861.30. The disclosure for this purchase can be found here. Company insiders own 17.50% of the company’s stock.

Hedge funds and other institutional investors have recently bought and sold shares of the business. Macquarie Group Ltd. lifted its stake in SS&C Technologies by 48.5% in the fourth quarter. Macquarie Group Ltd. now owns 331,783 shares of the technology company’s stock valued at $13,431,000 after acquiring an additional 108,319 shares during the last quarter. Wells Fargo & Company MN lifted its stake in SS&C Technologies by 5.5% in the fourth quarter. Wells Fargo & Company MN now owns 123,919 shares of the technology company’s stock valued at $5,016,000 after acquiring an additional 6,468 shares during the last quarter. Nomura Asset Management Co. Ltd. lifted its stake in SS&C Technologies by 14.2% in the fourth quarter. Nomura Asset Management Co. Ltd. now owns 21,710 shares of the technology company’s stock valued at $879,000 after acquiring an additional 2,700 shares during the last quarter. Raymond James & Associates lifted its stake in SS&C Technologies by 361.3% in the fourth quarter. Raymond James & Associates now owns 279,761 shares of the technology company’s stock valued at $11,325,000 after acquiring an additional 219,120 shares during the last quarter. Finally, BB&T Securities LLC acquired a new stake in SS&C Technologies in the fourth quarter valued at approximately $320,000. Hedge funds and other institutional investors own 70.75% of the company’s stock.

About SS&C Technologies

SS&C Technologies Holdings, Inc provides software products and software-enabled services to financial services providers. Its products and services allow its clients to automate and integrate front-office functions, such as trading and modeling; middle-office functions, including portfolio management and reporting; and back-office functions comprising accounting, performance measurement, reconciliation, reporting, processing, and clearing.

Better Buy: Facebook, Inc. vs. Twitter

In the world of social media, there's Facebook (NASDAQ:FB), and there's everyone else. Facebook has four products with over 1 billion users. Other social media companies are lucky to have one. Twitter (NYSE:TWTR), which once showed promise of reaching the same level of ubiquity as Facebook, has seen its monthly active user growth stall in recent years, inching slightly higher to 336 million in the first quarter, up 3% year over year.

But Twitter has had some successes lately. It has improved engagement among its monthly users, as exemplified by its double-digit daily user growth in each of the last six quarters. Management also says its shift to video ads has resulted in better return on investment for marketers, which it expects to eventually attract back to the platform. These accomplishments have Twitter trading at a multiyear high.

Facebook is also trading near its all-time high price, which may give investors pause when choosing among their investment options in social media. Let's take a closer look at both Facebook and Twitter stock to determine which is the better buy right now.

Image source: Facebook.

The same underlying business

Facebook and Twitter might cater to different audiences, but they still rely on the same underlying business model. Both companies want to keep your attention for as much time as possible. Users' engagement with each company's respective app provides opportunities for Facebook and Twitter to show ads and collect data to help determine which ad will produce the greatest value in any given instance.

Facebook CEO Mark Zuckerberg has recently commented that the company doesn't want to maximize time spent, but wants to improve the quality of time spent on Facebook and its apps. Facebook has even taken steps to reduce time spent on its flagship app and Instagram. Still, the goal is to capture users' attention. Zuckerberg just noted the quality of that attention is an important factor, too.

Facebook is extremely dominant with regard to capturing its users' attention. Daily users spend an average of over 40 minutes per day on Facebook. Instagram users spend another half hour or so. U.S. users may be even more engaged, averaging 58.5 minutes per day on Facebook and 53 minutes per day on Instagram, according to data from SimilarWeb.

Meanwhile, Twitter's engagement levels are relatively tiny. Users spend an average of just 1 minute per day in the app, according to Mediakix.

Twitter engagement is improving. Daily active users are increasing significantly faster than monthly active users. That said, with such low monthly user growth at Twitter, it's not hard to outpace that growth. Last quarter, Twitter increased daily users by 10% year over year.

Facebook managed to grow daily users even faster (13%) on top of its already massive user base. So, while Twitter is improving engagement, Facebook is also seeing an influx of new users to grow the total amount of time spent on its platform.

Once users are engaged, monetize them

Keeping users engaged is only half the battle, the other half is displaying ads that produce strong returns on investment for advertisers. This is where Facebook truly shines.

Due to its strong user engagement, Facebook has millions of data points on each user about their interests. It can use those data to effectively target advertisements for businesses no matter what size. That's how it's managed to attract over 6 million active advertisers. Small businesses, in particular, are heavily reliant on Facebook advertisements to drive growth.

Twitter, on the other hand, doesn't have the same breadth or depth of user data as Facebook. As a result, it's only managed to attract a small fraction of the advertisers that are on Facebook. A majority of Twitter's ad revenue still comes from large brands, who are simply looking to reach as broad of an audience as possible and aren't as reliant on data to create highly targeted ads like on Facebook. But with a smaller audience than Facebook, brand advertisers are only giving Twitter a fraction of their business.

Most importantly, Facebook is able to produce a better return on investment for advertisers both big and small. Twitter has recently boasted about the improvement to its advertisements' returns. But Facebook CFO Dave Wehner rightfully pointed out that marketers will compare ROI across platforms, not the same platform this quarter to last quarter. With Facebook dominating return on investment among social media apps, it's in the best position to win the vast majority of ad budgets.

A look at some numbers

Qualitatively, Facebook is hands-down a better company than Twitter, with strong user growth, excellent user engagement, and ad products that convert better for marketers. Let's look at how the two compare on valuation.

Metric

Facebook

Twitter

Price-to-sales ratio	12.87	12.69
Enterprise value-to-EBITDA ratio	19.93	57.28
Price-to-free-cash-flow ratio	30.62	49.46

Data source: YCharts. Table source: Author

The only area where Twitter has a better valuation than Facebook is in its price-to-sales ratio. Even then, the margin between the two is slim, and there's a clear reason why Facebook ought to have a higher P/S ratio than Twitter. Facebook's profit margins are absolutely massive, with an operating margin of 46% in the first quarter this year.�In comparison, Twitter posted an operating margin of just 11%. That discrepancy shows up in the two companies' EV/EBITDA valuations.

The story is also clear when looking at the amount investors value the free cash flow generated by both companies. Facebook's valuation is far lower than Twitter's. That's despite the fact that Facebook is showing improvements in its free cash flow while Twitter's growth is relatively slow. Facebook's free cash flow improved 33% in the first quarter; Twitter's improved 7%.

With better business operations and a better valuation, Facebook is a clear better buy for investors.