With all the buzz swirling around the Internet via satellite sector, one would think contracts totaling approximately $16 million won by NetSat Express Inc. would spark an interest in its parent company Globecomm Systems Inc. [GCOM].

But the announcement seemed to have had the opposite effect, and Globecomm has declined slightly since the announcement. Market shifts notwithstanding, Wall Street analysts are maintaining a positive outlook on Globecomm.

NetSat Express, a provider of satellite-based Internet backbone services, won the contracts from Telefonica Data S.A., the data communications subsidiary of The Telefonica Group [TEF], Spain’s largest telephone company.

The terms of the contracts call for NetSat to provide Internet backbone capabilities in five South American countries – Brazil, Chile, Colombia, Guatemala, and Peru.

The backbone service will use a new earth station, currently being built by Globecomm on Long Island, N.Y., and the Hispasat 1C bird. NetSat Express will manage, support and consult on the Telefonica data network. NetSat and Globecomm will operate and maintain the earth station.

…News Has Little Effect On Market Performance

This series of contracts is not an isolated incident of good news for NetSat Express and its parent Globecomm Systems.

“Although Globecomm and NetSat Express have been hitting their milestones, the market hasn’t treated concept stocks very nicely lately,” reported New York-based investment firm C.E. Unterberg, Tobin. “We are disappointed by the recent underperformance of Globecomm shares. At these price levels, we believe Globecomm remains attractive but will likely require stronger market conditions in order to perform very well.”

But market factors may not be the only reason people are shying away from Globecomm right now. “Recent weakness is not based solely on perception: NetSat Express and its peers require access to capital in order to sustain high growth. Fortunately, with the recent Globecomm secondary, NetSat is better off than most, however, sustained market volatility could be an impediment to growth,” reported Unterberg. The firm reiterated its buy rating for Globecomm shares.