The Perseid meteor shower is what is left of Comet Swift-Tuttle that last visited the inner solar system in 1992.  Each year in August Earth passes through a debris field left along the orbit of the comet.  Most debris items are the size pebbles or sand grains, but they enter Earth’s atmosphere at about 37 miles per second or 133,000 MPH.  In short, nothing physical responds too well if it is hit by debris.  That includes satellites, the space station, space craft and so on.  If you don’t trust that this is a risk, all you have to do is look in the annual reports of any major satellite company.  Again, it is a low risk, but a risk nonetheless.

There are many companies that could be affected if debris from a meteor shower were to make contacts with any of the satellites.  The Boeing Company (NYSE: BA), DigitalGlobe, Inc. (NYSE: DGI), GeoEye, Inc. (NASDAQ: GEOY), Gilat Satellite Networks Ltd. (NASDAQ: GILT), Dish Network Corp. (NASDAQ: DISH), DIRECTV (NASDAQ: DTV), SIRIUS XM Radio Inc. (NASDAQ: SIRI), Hughes Communications, Inc. (NASDAQ: HUGH), ICO Global Communications Holdings Ltd. (NASDAQ: ICOG), Iridium Communications Inc. (NASDAQ: IRDM) and Globalstar Inc. (NASDAQ: GSAT) and ORBCOMM, Inc. (NASDAQ: ORBC) are all likely monitoring their birds with a little more caution during this Perseid show.  There is also Orbital Sciences Corp. (NYSE: ORB) and Loral Space & Communications, Inc. (NASDAQ: LORL).

DISH Network notes, “Meteoroid events pose a potential threat to all in-orbit satellites. The probability that meteoroids will damage those satellites increases significantly when the Earth passes through the particulate stream left behind by comets. Occasionally, increased solar activity also poses a potential threat to all in-orbit satellites…. The loss, damage or destruction of any of our satellites as a result of an electrostatic storm, collision with space debris, malfunction or other event could have a material adverse effect on our business, financial condition and results of operations.”

On this front, DIRECTV notes in its annual report, “In-orbit risks include malfunctions, commonly referred to as anomalies, and collisions with meteoroids, other spacecraft or other space debris….. In the event of a complete satellite failure, our services provided via that satellite could be unavailable for several days or longer while backup in-orbit satellites are repositioned and services are moved. We are not insured for any resultant lost revenues.”

The Boeing Company (NYSE: BA) claims to be the world’s leading manufacturer of geostationary satellites and it manufactures satellites for all walks of the satellite world.  It recently acquired Argon ST in the satellite arena.  Unless many satellites were simultaneously knocked out or damaged, Boeing is too large and too diversified to get any major benefit from the possibilities of satellite woes based on meteor showers.

Two other companies in the satellite manufacturing and servicing businesses that are direct pure-plays in the satellite industry are Orbital Sciences Corp. (NYSE: ORB) and Loral Space & Communications, Inc. (NASDAQ: LORL).  Both companies are small enough ($1.44 billion market cap at Loral and $777 million at Orbital) that any new business as a result of repositioning, relaunching, or reordering of new satellites would actually be a win for either or both of these two.

DigitalGlobe, Inc. (NYSE: DGI) and GeoEye, Inc. (NASDAQ: GEOY) were two recent winners that hit all-time highs after the two received $7.3 billion in combined orders to supply satellite imagery to U.S. intelligence services.  Digital Globe has commercial high-resolution earth imagery products and services that are sourced from its own advanced satellite constellation.  GeoEye sells international information services to government and commercial markets.

Dish Network Corp. (NASDAQ: DISH) and DIRECTV (NASDAQ: DTV) compete head to head for in-home and in-office satellite ‘cable’ TV subscribers.  Each has hundreds of channels.  Dish had 14.1 million subscribers at the end of 2009 versus DIRECTV’s 18.5 million U.S. and 6.5 million in Latin America.  As of the end of 2009, DIRECTV had a network of 12 geosynchronous satellites and it appears that DISH had more when you include its leased satellites.

Gilat Satellite Networks Ltd. (NASDAQ: GILT) is an Israel-based company which provides Internet Protocol (IP) based digital satellite communication and networking products and services worldwide.  The company was founded in 1987 and has shipped over 750,000 VSATs (Very Small Aperture Terminals) to more than 85 countries on six continents.

SIRIUS XM Radio Inc. (NASDAQ: SIRI) is satellite radio monopoly and it ended the latest quarter with some 19,527,448 subscribers.  It has multiple satellites between it and the XM network and any single satellite would likely only result in some interruption.  Still, any ‘event’ would not be a welcome wagon for Mel Karmazin and friends.

Hughes Communications, Inc. (NASDAQ: HUGH) offers up broadband satellite network services and systems for broadband Internet services via commercial-grade antennas. The company also provides satellite, wire line, and wireless communication networks and services to all business sectors around the globe.  The company had about 326,000 subscribers on SPACEWAY 3 as of June 30, 2010 and it has shipped more than 2.2 million systems to customers in over 100 countries.  In short, satellite ‘interruption,’ damage, or destruction would not be welcome.

ICO Global Communications Holdings Ltd. (NASDAQ: ICOG) was founded in 2000 to launch and operate a global constellation of communications satellites to support voice and data services to mobile, portable and fixed devices.  This is still a developing company where its DBSD North America unit is being restructured and the company will be a minority shareholder upon that completion.  The company recently completed a $30 million rights offering and the stock has never really taken off and its remaining ten partially completed MEO satellites were placed in storage when construction was suspended in 2004.  It has a case against Boeing which it won a $603 million claim, but that is on appeal and is expected to be concluded next year.

Iridium Communications Inc. (NASDAQ: IRDM) and Globalstar Inc. (NASDAQ: GSAT) are two of the satellite phone service providers that provide satellite audio and data communications.  Globalstar has recently taken delivery of the first three second-generation satellites from manufacturer Thales Alenia Space and is expecting three more later this month for what it hopes will be an October launch.  With over 400,000 subscribers, Globalstar claims to be the world’s largest provider of mobile satellite voice and data services.

ORBCOMM, Inc. (NASDAQ: ORBC) is a smaller player that operates satellite-based data communications for a two-way wireless data messaging system optimized for narrowband data communications via about 29 low-Earth orbit satellites.  It is into space-based Automatic Identification System services.  It announced this week that its total revenues for the June quarter were $7.8 million.  Despite a 15.8% revenue jump, its satellite network would have to face multiple strikes to really interrupt operations and the odds of that are so low that it is hard to fathom.

Most likely there will be no major fallout from this.  If there is, it will be costly.  To date, meteor showers and debris showers have brought mostly entertainment at night under clear skies.

JON C. OGG

Abbott Laboratories (NYSE: ABT), Altria Group Inc. (NYSE: MO), American Water Works Company, Inc. (NYSE: AWK), Burger King Holdings Inc. (NYSE: BKC), Energy Conversion Devices, Inc. (NASDAQ: ENER), Genzyme Corp. (NASDAQ: GENZ), Kroger Co. (NYSE: KR), Orbital Sciences Corp. (NYSE: ORB) and Wal-Mart Stores Inc. (NYSE: WMT).  Two similar situation stocks that are Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS) were all the underperformers of the time.

We have broken these into two groups with the first being the ones that have managed to spark a recovery and rallied more than the markets.  Since the cut-off date of October 9 used for these prices, the DJIA is up 5.3% and the S&P is up 3.2%.  The first group is the winners and we won’t spend much time there other than how they have performed since the October 9 cut-off date:

Abbott Laboratories (NYSE: ABT) has actually outperformed the market since October 9 with gains of 8.2%, but this still is lagging some key peers in performance.  This is on top of what was a 10% rally in the month before our October cut-off.  Because estimates were raised by analysts, Abbott now trades at only 10.6-times 2010 earnings.  This has still been a success, because guess which stock hit a 52-week intra-day high on Friday at $37.50.

Altria Group Inc. (NYSE: MO) participated in the gains as well.  Shares are up 6.9% since  October 9 and is now up over 35% from the March lows. The Big-Mo is actually still cheap at 10.3-times 2010 earnings and its dividend yield is about 7%.  The Big-Mo is now only 1% under a 52-week high, but still lags if you go back about 15 months.

American Water Works Company, Inc. (NYSE: AWK) has recovered by over 11% since October 9, one of the better performers.  Despite being dead money since its IPO, the largest US water utility is only about 3% shy of 52-week highs and still yields 3.9%.  It also seems as though it needs much gain in earnings power to justify a considerable run further from here as it trades at over 15-times 2010 earnings estimates. Still, not bad at all… particularly as RWE unloaded more shares since the past reference.

Wal-Mart Stores Inc. (NYSE: WMT) had been just sitting quiet despite being the go-to retail winner and champion of America during the recession.  On October 9, its shares were at $49.97, but they now have rallied 8.5% to $54.24. The stock would have to run close 10% more before a 52-week high alert would go off like we saw with other major retailers in November.  The stock is technically still ‘left behind by the rally’ because it is still down 1.6% for all of 2009.  It is hard to call this an overall market catcher-upper, but it has risen by a better rate than the DJIA and the S&P 500 since the October 9 period.  Analysts have an average target of roughly $60.00 on the stock and its 13.7-times Fiscal Jan-2011 earnings estimates is actually still mid-range compared to competitor valuations today (18.4-times for Costco and 12.8-times for Target).

There is still the lot of underperformers or those which have lackluster returns.  It seems that the stocks that the rally left behind may still have value investing rewards ahead.  But there are some with added risks as well.  We wanted to re-review forward valuations based on Thomson Reuters consensus, relative performance to the market and peers, and what each prospects seem to be for the coming months or out into 2010.

Burger King Holdings Inc. (NYSE: BKC) is probably not that exciting with a 4.6% gain since October 9 with shares now at $18.27.  It is still a gain, but lackluster even if compared to market averages.  The stock is still down 40% from post-IPO highs and is technically back close to its IPO price.  This fast-food chain is supposed to be among the winners, yet that crazy looking king character in commercials isn’t luring in investors.  Burger King would have to run over 50% before it makes many of the post-IPO investors whole again.  The good news is that it trades at only 11.5-times 2010 estimates and its 1.4% dividend yield has a lot of room to be raised.  Problems aside, this still has much room to go if it can get back to earnings upside and if it decides to get more shareholder friendly.

Energy Conversion Devices, Inc. (NASDAQ: ENER) is down another 6% from the October 9 cut-off, yet the stock immediately ran up over 20% after we covered it the first time.  It seems that the woes here are not going away nor are they getting better. Analysts now expect Fiscal 2010 (June) AND Fiscal 2011 to have losses, much worse than before.  We think the only issue that may help the company is if oil prices suddenly rocket or if any of those buyout rumors can resurface.  This is down by about two-thirds from a 52-week high with shares now at $10.17, but this was an $80 stock at the peak of the solar bubble.  Yes, it was a bubble.  And internal opportunities seem few.

Genzyme Corp. (NASDAQ: GENZ) has remained a serial disappointment as shares are only about 6% off the 52-week lows and at $49.98.  While the stock has recovered, it rolled back over and is now down over 10% from October 9.  Serious manufacturing and contamination issues are not what a biotech drug companies wants to be trying to correct, and now there IS more likely competition.  The stock still trades at a deep discount to large biotech stocks and it would now take more than 50% gains before it reached its 2008 highs. Earnings estimates have continued to be brought down, and the stock now trades at under 14-times normalized 2010 earnings.  There are continued risks here, and we’d probably wait to see if one more shoe drops.  It is cheap, for a reason.

Kroger Co. (NYSE: KR) had just recovered almost 10% before that October 9 cut-off and shares did go another 10% up before coming back down.  Shares were at $22.22 at the time and are still $22.50 as of Friday. That is a 1% gain compared to a gain in Safeway (NYSE: SWY) of over 4%; and Kroger is still up only about 16% since March’s lows.  The stock trades at 10.6 times Fiscal Jan-2011 earnings estimates and it would still have to rally over 30% before its 52-week highs came back into play.  The rally left it behind, but it seems investors do not care one way or the other.  The stock is cheap for value investors and probably has very limited downside based on all of the available data, but there is just no excitement to be found here.

Orbital Sciences Corp. (NYSE: ORB) is one of the key stocks for investors who want to invest in the development of outer space.  Yet something isn’t working here.  On October 9, this was at $14.73, yet shares are down over 11% since then at $13.05.  This stock is also the riskiest of all these underperforming stocks as its main operations are in small space and rocket systems, as well as GEO satellites for communications and broadcasting and LEO spacecraft that perform remote sensing and scientific research.  Orbital is now only up 7.7% from the March lows and it would have to run 50% to hit 52-week highs and could still double before hitting highs of 2008.  Earnings estimates have come down substantially, on what appears to be based upon guidance from its last earnings.  Loral Space & Communications (NASDAQ: LORL) is a comparable stock, and it is up both exponentially from recent lows and almost at 52-week highs.

Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS) are thought of in almost the same light by the investment community.  The market has not favored telecom stocks, and both are in the prepaid or no-contract segment of the economy.  Based upon how many people have made poor and/or cash- strapped over the last 24 months, both companies should have a mountain of subscribers to fight over.  Yet there is now major carrier competition and they are probably dwindling each other in some markets.  Leap’s shares were at $16.15 on October 9, and they are down over 5% at $15.28 now.  MetroPCS is even worse as shares were at $8.07 on October 9 and are now at $6.60 for an added 18% loss.  There was a merger attempt here once which failed, and it seems that price might need to get a gut-check.  A stock-for-stock deal would keep holders from being forced into a loss position if the merger were all-cash.  This may be a time of need rather than a time of choice for these two.

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JON C. OGG
December 7, 2009

But almost as always, there are still some key very large and/or very active stocks which have not recovered anywhere close to the same amounts with the overall stock markets.  Some of these lagging stocks are Abbott Laboratories (NYSE: ABT), Altria Group Inc. (NYSE: MO), American Water Works Company, Inc. (NYSE: AWK), Burger King Holdings Inc. (NYSE: BKC), Energy Conversion Devices, Inc. (NASDAQ: ENER), Genzyme Corp. (NASDAQ: GENZ), Kroger Co. (NYSE: KR), Orbital Sciences Corp. (NYSE: ORB) and Wal-Mart Stores Inc. (NYSE: WMT).  Two similar situation stocks that are Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS).  We wanted to explore the forward values and relative performance, and the consensus estimates based upon Thomson Reuters data.  Only two of these stocks have market capitalization rates under $1 billion, and almost all are very actively traded and well known in their sectors.

Abbott Laboratories (NYSE: ABT) is on deck to report earnings this week and it was surprising how far it has lagged to some of the large peers.  The good news is that it has started to participate in the rally with a 10% gain over the last month.  Saying it has ‘only’ recovered by 21% from its April-May lows shows how well the market sentiment is and how well other stocks have performed.  But shares are only about 10% higher from the early March inflection point lows.  Abbott trades at about 12.2-times normalized 2010 earnings estimates of $4.12 and the stock carries a 3.2% dividend yield.  Guidance was spotty before and obviously the sector has political risks into 2010 and beyond because it is tied to healthcare.

Altria Group Inc. (NYSE: MO) might not be a shock that it has lagged if you believe that smoking is a dead industry in the future.  But the one recognition that has always been the case is that Big Tobacco has always survived.  Things are even good enough that it recently juiced up its dividend and appears to have enough earnings power for plenty of dividend coverage for the future.  It is hard to bash a stock that has risen 28% from the March lows, but this greatly lags the performance of Philip Morris International, Inc. (NYSE: PM), Reynolds American Inc. (NYSE: RAI) and Lorillard, Inc. (NYSE: LO).  The Big-Mo trades at just under 10-times a normalized estimate of $1.85 EPS for 2010 and its dividend yield is almost 7.5% now that it has been hiked.  This only needs to rally about 14% to hit 52-week highs, so this is just representative more of nearly-dead money rather than anything that looks or feels sinister.

American Water Works Company, Inc. (NYSE: AWK) is in that long-discussed great sector of water, but as a utility.  It may just be more shares sold and the risks of more shares being sold, but this one has effectively been dead money ever since it came public (again).  At almost $20.00, shares are up about 23% from the absolute lows. That looks to be well under all of its larger peers here in the U.S.  This stock and sector does have a premium considering the utility status, but analysts are looking for growth from 2009 to 2010.  This one trades at less than 14-times normalized earnings estimates of $1.46 EPS for 2010.  America’s largest water utility did hike its dividend for August and it now yields about 4.2%.

Burger King Holdings Inc. (NYSE: BKC) is supposed to be in a class of eating-out that wins in recessions via fast food and very casual dining.  It seems like that crazy looking king character in commercials that scared so many kids has also scared investors.  This company has only recovered some 13% from its recent 52-week lows despite only trading at about 12.2-times its Fiscal-2010 (June) earnings estimates.  Its market cap is just under $2.4 billion.  The much larger, and far better-run, McDonald’s Corp. (NYSE: MCD) has not exactly been a performing beast this year, but its shares are up 25% from lows.  The Big Whopper would also have to rally almost 50% before hitting 52-week highs.  Unfortunately, its dividend yield is only about 1.4%.  For this to start performing again, management is going to have to do a better turnaround plan than what it has managed so far.

Energy Conversion Devices, Inc. (NASDAQ: ENER) is one where the figures are actually a tad better than what is reflected because of the solid gains seen on Monday.  Before Monday, this one was not even 10% above its 52-week lows and shares are still under the inflection point lows in the market during March.  Despite this being one of the old top solar stocks for traders, it has failed miserably to bounce when you consider the bounce of the major solar players.  First Solar, Inc. (NASDAQ: FSLR) is up over 75% and Suntech Power Holdings Co. Ltd. (NYSE: STP) is up almost 200% from its absolute lows over the last year.  Unfortunately this is expected to post a loss for all of its Fiscal 2010 (June) and estimates are $0.28 for its following Fiscal 2011 (June).  There is no dividend and this is likely to trade around how well oil prices do and on its own guidance and not its trading based on how the market does.  This is down from a 52-week high north of $48 and down from a peak of $80 back in the Summer-2008 highs.  No dividends are to be found here.

Genzyme Corp. (NASDAQ: GENZ) did recover from lows in August.  This troubled biotech giant is up about 20% from the absolute lows in August and ‘only’ up about 16% from its lowest close of $48.19 in August.  The reason here is simple.  Serious manufacturing issues resulted in contamination issues, and the company is effectively under a red flag warning by the FDA.  But this also trades at a much deeper discount than most of the large biotech stocks.  It would take close to a 50% rally for this to challenge its old 2008 highs.  The question that exists here is not over whether it still has an addressable market, but whether it can get its house entirely back in order before competition comes on in 2010.  Like most biotech companies, it has no dividend.  Earnings estimates are now all over the place, but it trades at roughly 14-times normalized 2010 earnings.  Even if you take a median estimate over an average estimate for 2010, that forward multiple is only around 15-times 2010 earnings.  Of course there are still risks here, but that is why the stock is already down so much on its woes.

Kroger Co. (NYSE: KR) was also up on Monday as an analyst upgraded the stock on valuation.  But the stock is still a laggard compared to rival Safeway (NYSE: SWY).  The company’s latest earnings report kept it from rallying because it was still experiencing difficult pricing and that has kept its shares from rallying.  We have barely seen a 15% gain since March’s lows.  Its 2010 ends in January 2011, but it trades at 10.4-times the $2.14 estimate.  This is representative of a mature grocery sector and the discount to Safeway is small but still there:  Safeway is up 24% from its lows and trades at 11-times the comparable forward earnings.  Analysts are still looking for growth and this would have to rally over 30% before its 52-week highs came back into play.

Orbital Sciences Corp. (NYSE: ORB) may seem the riskiest of all these underperforming stocks as its main operations are in small space and rocket systems, as well as GEO satellites for communications and broadcasting and LEO spacecraft that perform remote sensing and scientific research.  But effectively, the company is a pure-play on space operation and exploration, including deep space.  This stock is still down about one-third from a year ago and is ‘only’ up 22% from its lows in March.  Earnings estimates have come down over the last quarter but there has not been a significant downgrade worth noting from analysts of late.  With the government purse being tight and with the Obama administration reportedly considering privatizing much space exploration, a wild card exists here.  Loral Space & Communications (NASDAQ: LORL) is considered its top comparable stock, and that one has risen exponentially from its lows.

Wal-Mart Stores Inc. (NYSE: WMT) is supposed to be the winner in the recession, right?  Yet don’t go looking for it to be the golden child of stock performance.  And its 2.2% dividend yield might not sound like much.  Wal-Mart is under $50.00, and is only about 8% above its 52-week lows.  It would also take ‘only’ a 20% gain for Wal-Mart to challenge its 52-week highs.  And year-to-date the stock is down 10%.  It seems that its policy of dropping guidance and its same store sales reporting has not been as rewarding as it would hope.  Now the valuation question for the world’s largest retailer.  This trades at about 13.7-times a normalized 2010 earnings (actually Jan. 2011) estimate of $3.92.  Wal-Mart is still growing.  It would also seem as though that as long as there is an army of unemployed and as long as the notion of thrift is semi-secular, then this is lagging and cheap. Target Corp. (NYSE: TGT) trades at about 14.5-times 2010 comparable estimates, but Target has also almost doubled from its absolute lows.  Costco Wholesale Corporation (NASDAQ: COST) has rallied 50% from its lows, despite a much higher forward multiple.

Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS) are two very similar companies that have been gross disappointments.  Despite the overall wireless sector being a tough space and despite fairly low performance even from the leaders, these two have been an outright disappointment by every single measurement besides being great performers for short sellers.  As there once was a merger on the table (which was blocked) and as these are both in the no-contract or pre-paid wireless sector, we are only going to mention the performance metrics.

• Leap Wireless is down close to 40% year to date.  The stock is up about 15% from its 52-week low.
• MetroPCS is down over 45% year to date.  The stock is also not even 10% off of its 52-week lows.

Leap is now expected to lose money in 2010, and if the $0.69 estimate is right on MetroPCS then it trades at about 12-times 2010 estimates.  Unfortunately, that is 20-times a 2009 estimate for MetroPCS.  We won’t go as far as to predict a merger here, but a proposed merger this time around could be out of need and not out of greed.

Again, the estimates are based on Thomson Reuters estimates and share performance is based from the weekend when a static snapshot existed equally among all.  Many of these estimates will change throughout this earnings season.  Despite the rally, there are still some very large or very active stocks which have just not participated.

JON C. OGG
OCTOBER 12, 2009

The pricing is technically above the $16 to $18 per share price range we had previously indicated.  The company has two high-resolution satellites for detailed mapping and plans to launch a third satellite later this year. If you want a direct comparison, the company competes head to head with GeoEye, Inc. (NASDAQ: GEOY).

Revenues were $106.8 million in 2006, $151.7 million in 2007, and $275.2 million in 2008.  Be advised that about 70% of the revenues were from the US government.  Two other customers are Google, Microsoft, and Garmin.

Early indications are said to be north of $20.00, although that may rise or fall into the opening of this IPO.

JON C. OGG

The listed shares are noted 43,464,751 shares of common stock outstanding on April 15, 2009 and 44,871,007 shares of common stock outstanding after the completion of this offering.

Approximately 14.7 million shares are in the offering.  The company will be offering 1,366,256 shares of its common stock and the selling stockholders are offering 13,333,744 shares.

DigitalGlobe’s satellite images are used by the defense sector, energy sector, mining sector, and more. The company’s revenue was roughly $275 million in 2008.

JON C. OGG

Jon C. Ogg
July 18, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Jon C. Ogg
July 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.