New York --EchoStar Communications Corp. remained
the consensus pick among stock analysts at the annual SkyForum panel of Wall Street
EchoStar was the top pick by four of six analysts. Ted
Henderson of Janco Partners chose TCI Satellite Entertainment Inc. (TSAT), which owns
about 37 percent of PrimeStar Inc.'s equity, figuring that the battered stock had a
chance to rise from $4 per share to $8 this year if PrimeStar succeeds in shifting to
high-power direct-broadcast satellite service.
Henderson said he has come around to like EchoStar, as well
-- "Charlie [Ergen] has made me look like an idiot" -- but he thinks that TSAT
can double in price faster than EchoStar can go from $20 per share to $40.
A year ago, Henderson said, he endorsed cable stocks over
DBS stocks. He still backs cable stocks, believing in the two-way broadband plant, but he
now feels that there are buying opportunities among depressed DBS stocks.
Robert Kaimowitz of ING Baring Furman Selz LLC picked
General Motors Corp.'s Hughes Electronics Corp., which owns DirecTv Inc., because of
its market leadership in DBS and other core businesses.
But Bear Stearns & Co.'s Vijay Jayant tabbed
EchoStar because it has raised enough money, it has pared its subscriber-acquisition costs
to an industry-low $325 per customer and it has enough cash-flow potential to keep
leverage in check.
"From a fundamental standpoint, all pistons are
firing," he said.
Others endorsing EchoStar were Lou Kerner of Goldman Sachs
& Co., Marc Nabi of Morgan Stanley Dean Witter and Thomas Watts of Merrill Lynch &
Kerner said cable and DBS stocks have tended to trade
against each other based on events that seem good for one and bad for the other, such as
AT&T Corp.'s aborted alliance with DirecTv. But he added that there was room for
both to grow as the multichannel-television universe grows, and he thinks that investors
will eventually agree.
Nabi said Morgan Stanley likes cable operators like Cox
Communications Inc., which has 10 urban clusters where it plans to offer a package of
video, voice and data services. But DBS can successfully penetrate outside of those urban
clusters, he added. Watts said that market could be as high as 35 million homes.
The analysts also said they expect to see EchoStar and
other DBS operators start offering "push" Internet services, such as access to
popular Web sites via satellite. Kaimowitz said he felt that DBS operators eventually need
to offer full two-way services, possibly by using Ka-band satellites.