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TWST: All of the companies have large capital needs. How might rising interest rates and capital markets tightening impact these stocks?

Mr. Vrattos: That's a critical question right now as these companies begin hitting the market with their products. They may be in need of some more capital not only to carry their interest and operating costs, but also to fuel or accelerate their marketing programs. With the capital markets temporarily closed, that's a real concern. In the wake of a few failed satellite projects, it's even more of a concern.

TWST: Which companies are you focusing on?

Mr. Vrattos: Well, I think we always focus on any company or situation where we see value or mispricing. But clearly, uncertainty generally brings opportunities and it really depends on the situation. I think John's point is well taken that in a defensive market, companies that have good cash flow and more established businesses certainly become more interesting. Another company, not a company I'm particularly familiar with, but one I understand may be a smaller and cheaper version of PanAmSat (Nasdaq:SPOT), is SES/ASTRA.
I think one interesting situation that also seems mispriced to me is British Sky Broadcasting (NYSE:BSY), which is a DBS company in the UK. While it's been cut in half from its highs, it still trades at about 50 times cash flow. While well managed, it's in a relatively mature business and actually has been in a rather defensive position, as cable has gained momentum in the UK. I think a few Internet investments they made six months ago when we were in a bull market may have gotten people little too “exuberant” about the company.