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This Share Has Got Life, Jim - but Not as Tom Knows it

By Malcolm Stacey | Tuesday 14 February 2017


Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Hello Share Puddlers. I’ve previously commended to you the outer space firm of Inmarsat (ISAT). It sends satellites up there to help with mobile phone signals in difficult places, like Everest. It also provides navigation for ships and planes.

Uncle Tom doesn’t agree with me that this is a reasonable punt. He’s not sure that satellites will be as vital as they are now to communications in the future. But I believe that communication technology, amazing though it has become, is still in its infancy. And Inmarsat is a company that likes to go where no man has gone before.

The shipping industry had a bit of a rough ride in 2016 and this knocked Inmarsat’s share price for six. So Tom was right in the short term. The share price rallied, but then fell back again when analysts warned that airlines faced dropping profits.

However, in recent weeks the share price has been clawing back. This is possibly due to at least one big link-up planned between a telecoms company and an air travel network. Will this mean we can access the internet on boring airline journeys? It seems so.

Inmarsat has big customers, including British Airways, sorry, IAG as it's now known, and Lufthansa.

I’m hanging onto this family’s shares, especially as the dividend I have is nearly 5% and the P/E is now around a modest 15.

There is an exciting topicality associated with Inmarsat, which you don’t often get with engineers. It can be in the news searching for lost planes, for example. And I rather like the idea for investing in outfits that push boundaries - especially in space.

It is speculative because one can never know if its competitors in the same futuristic game will come up with a better, cheaper technology. But why buy shares if you’re not prepared for a few risks?

As we like to say in the Punter’s Return.


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