Satellite internet provider Speedcast International Ltd (ASX: SDA) first came to the attention of many investors when it bought up the assets of failed company Newsat, and subsequently entered the S&P/ASX 200 (INDEXASX: ^AXJO) (ASX: XJO) index recently.

Now up 80% in the past 12 months, is the company a buying opportunity? On the face of it, it doesn’t appear so. Speedcast trades on over 100 times its Net Profit After Tax for the year ending 31 December 2015.

If we use the company’s Net Profit After Tax and before amortisation of acquisition related intangibles figure of $14.8m, Speedcast trades on a less exorbitant 37 times, which could prove to be decent value over time.

Remote area satellite coverage

Speedcast uses satellites to provide internet to remote areas. This has previously been used by oil rigs and the like, but recent contract wins show more diverse applications. Speedcast has landed contracts in Kiribati, Pakistan, and Afghanistan providing internet services to government and industry bodies.

The remoteness of some of these regions heavily favours Speedcast’s technology, which is significantly cheaper and faster to deploy compared to traditional cable networks. This also helps to reduce competition, as does the difficulty of doing business in these regions (as according to World Bank Ease of Doing Business ranking).

With less competition, Speedcast is likely to be able to maintain a quite profitable business in these areas, whose populations are heavily under-served when it comes to connectivity. Having a foot in the door of the Middle East is likely to serve Speedcast very well over time if its current contracts go well.

Growth by acquisition

Speedcast has also been growing acquisitively, and the most recent purchase, NewCom, gives Speedcast a foothold in the Americas and Africa. Much like Speedcast’s existing business, NewCom customers include telecoms, governments, maritime, oil, gas and mining businesses. The new business is expecting significant growth.

Importantly, Speedcast management has been shareholder-friendly in the way the acquisitions are financed, preferring to use cash and debt with a small amount of shares rather than large equity raisings.

So although Speedcast might look a little expensive today, the company is expanding rapidly and has a number of opportunities going forward. Over the next few years I expect Speedcast could rise significantly further from today’s prices. Before jumping headlong into the stock however, readers should consider the latest recommendation from The Motley Fool’s top investment advisors…

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.