Can Dish Network Stock Return To Its Pre-Inflation Shock Highs?

Dish Network stock (NASDAQ
NDAQ
: DISH) currently trades at $6 per share, around 87% below its level of $$46.53 on May 7, 2021 (pre-inflation shock high), and seems to be undervalued. Dish Network saw its stock trading at around $17.90 at the end of June 2022, just before the Fed started increasing rates, and is still 67% below that level. In comparison, the S&P 500 gained a solid 19% during this period. The stock price has suffered over recent months due to a cyber attack on Dish’s IT systems, a secular decline in the company’s core satellite TV operations, and concerns about the company’s high debt load. This was despite a decline in the inflation rate in response to the Fed’s aggressive rate hike plan and the possibility of a gradual stabilization of Dish revenues as its wireless business eventually benefits from the 5G wireless rollout and the company’s massive spectrum holdings.

We note that DISH stock has had a Sharpe Ratio of –0.5 since early 2017, well below the ratio of 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.