So Telstra (TLS) seems to is looking to breakout. We all know TLS is the giant in the telco sector and that any trend that telstra is in is sure to determine the trend in it sector. Just look at the heatmap, TLS is the one making the move on the charts and the rest are green just for fun.
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So what does this mean for SAS....I'll get to that later?
IMO investors will soon be calling the bottom of the XTJ (Telco) down trend and in-turn will be bargain hunting. Things that will be looked at are the obvious metrics, profit, debt, cash ect. We know SAS doesn't have any meaningful revenue let alone profit. So cash in hand and lack of debt are obviously important.
However these are not the only metrics and I will argue that the following drivers are what bargain hunters will ultimately be looking for in what is really lethargic, lumbering sector that is starved of growth.
Innovation is the headline act- and in the telco sector, that comes in the form of wireless and the IOT revolution
AKA the
5G roll out.
So what is 5G - 5G is a wireless connection built specifically to keep up with the proliferation of devices that need a mobile internet connection. It's not just your phone and your computer anymore, either. Home appliances, door locks, security cameras, cars, wearables, dog collars, and so many other inert devices are beginning to connect to the web.
5G is an innovation that fosters further innovation.
So once again what does this mean for SAS?
Well this new interconnected world is great when you are at home, in the office or in the city but what happens when you go rural or third world? Well silence.... Your apple watch cannot tell you the weather, you EV cannot get software updates, sensors can sense but cannot report back.....you get the point.
So does the whole world need to be connected? Well yes because as first world economies move from a "blue collar" work force to a "white collar"-data driven work force, the third world becomes the whole worlds bread basket. For the third world to become the whole worlds main source of food, then certain efficiencies need to take place, monitoring of crops, supply chain check points, financial transactions and the communications to facilitate all of the above.
This is where SAS comes in, SAS provides the communication framework in the remote areas. Satellites/ satellite communications are one of the keys to global growth. The key to driving efficiencies in both the first and third worlds. If deployed cheap enough, then no undersea cables are required (disruption 1), no cellphone towers are required (disruption 2). I'm not saying that traditional telcos will not gain from this, in fact I see it being a complimentary service, an avenue of growth that telcos have been longing for.
5G is the tip of the ice-berg, satellites communication provided in a cost effective way is the iceberg proper. It is the reason why facebook, google, elon, oneweb ect have talked about it.
Satellite communications is not just a a growth avenue of the telecommunications sector. It has the potential disrupt how the world works as a whole.
A quick look at the SAS chart.
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ADX looks to be weakening on the down trend. PDX could move above the MDX pretty soon.
