Cardinal Resources Limited (CDV.TO)

Likes the technology space and thinks this is an overlooked stock. Chart shows the area of resistance at around $4.30 which broke up through this in April. This is a good story.

Watching this very carefully. What has caught the streets attention is their “exactEarth” business, which helps to pinpoint where ships are in the ocean. The street is discovering that this is probably worth a lot more than what it is being given credit for. At some point they might monetize this by selling it. Thinks they own 70% of it right now. The cash they would get would be used to grow their base business, increase the dividend or allow them to make some acquisitions.

(Top Pick May 5/14, Up 34.70%) The stock treaded water for a while. He knew there was potential in a business called ‘exact earth’. The stock is up about a dollar due to re-valuation. They also made two more acquisitions in the last year. They made a lot of really good moves. The core business is worth a lot more. It is a core position for him.

Satellite company and also has exactEarth technology, which tracks vessels in the seas. Starting to consider spinning that out or IPOing it, and could turn out to be a nice value creator for them. More expensive than what he likes to see, at 27X earnings. Added it to his growth portfolio because the growth looks really, really good. The satellite market is really growing right now. They have a really good niche. When you are putting components onto a satellite, price is not an issue. This is a very, very high margin business in an industry that is growing very, very fast. Recently did an acquisition called Pacific Wave which makes components for satellites. Possible takeover target. Dividend yield of 2.53%.

A very well-managed company. He bought in at about $1.90. Thinks that at some point it will break out of the range. A smartly run company. Feels their engineers have the eye on the ball and know what they are doing. Looking to the future, satellites are the one place to be.

In aerospace. They previously had some engine team issues, where they had some contracts, bid on them, but didn’t charge enough and ended up losing a lot of money. Because of that, he had stayed away for a while. Now the space has done fairly well. It was never traded at a high valuation and has always been fairly cheap. However, every time he thinks it is cheap, it is cheap for a reason.

(A Top Pick Nov 26/13. Down 5.69%.) Sold his holdings but is now back into it at lower levels. A very lumpy business where you are selling big projects. All the budget constraints on satellites in the US affected them. To offset that, there is positive news coming out of their ExactEarth, which tracks ships, etc. all over the globe through satellite.

Satellites are making a comeback right now. This company has 2 pieces, a marine service constellation that helps navigate ships, as well as transponders that go on to high definition satellites for televisions. Both are fairly well placed here. Stock has had a tough time because management has been on the bleeding edge of the Marine technology development. Thinks they’re getting some traction and he is starting to watch the stock.

Very interesting Canadian play and underfollowed. Their parts are in about 80% of satellites in orbit. Now they are bidding on ships. They announced last week they got a big contract. If this business starts to generate earnings for them, then it should go somewhere.

Likes the valuation. They are a leader in their field. Huge market share. Very profitable, steady business that trades at a low multiple. They are looking at tuck-in acquisitions and they have an activist shareholder. Lot of potential catalysts and a very reasonable value.

Likes the satellite space a lot. The US federal government has put a damper on this company a little, but what has been making up for that is commercial satellite business. Also, have an extra business called Exactor which tracks ships by satellite. This is now earning revenue for them and is EBITDA positive. Thinks this will continue to grow and add to the bottom line in cash flows. They are going to initiate a dividend. Represents very good value.

This could trade at much higher levels. They seem to have a wonderful handle on what they are doing and where they are going. Satellite is a great space to be in. Thinks they have a lot of potential going forward.

Started paying their 1^st dividend about a month ago. Historically this had been a bit of a troubled company. They get contracts and they have to meet satellite launches so there are very tight time frames. If they run into trouble, they have to outsource some of the work and when they do this, their margins go way down. Have fixed that problem for the most part. Have a very, very strong competitive advantage. They have never had a product fail in space. Good company. This will fit nicely into the Cdn small cap tech names.

Ranks just outside of the range of what he would consider a Buy right now. This is one of those businesses that tend to be very lumpy. They build components for satellites. When the upgrade cycle is happening and they are launching a lot of satellites, their business tends to be very good. We are starting to move into that right now but it is probably in the early stages of that. He hasn’t seen the earnings ramp up yet. Yield of about 3%.

He held it for 5 years but trimmed. Normally he doesn’t buy high tech but he thought it was fundamentally cheap. They turned around their business. Management is excellent. If it is a play company, it will go higher than $5, but the government will be very careful who is allowed to buy into it.