Cardinal Resources Limited (CDV.TO)

Great Canadian story. Make 80% of the components that go inside satellites that are in orbit. Very good reputation. Have been driving their margins higher. Backlog has been doing quite well over the last number of quarters. Had a bit of a stumble last quarter, but that was offset by their Exact Earth, which tracks ships by satellite.

Satellite part maker. An interesting sector. 80% of satellites in space have Com Dev parts. They have a new business line that is ramping up and expected to break even this year. It will be a high margin business for them if they can get it going. Most recent quarter they had a very positive book to bill.

One of the biggest shareholders. They have satellites around the world. An activist shareholder has got onto the board and he is waiting to see what this person does. This is a potential take-over candidate.

Has good years and bad years and there is great lumpiness with the contracts. Screens fairly well right now but and inconsistent track record. He would prefer McDonald Detweiler (MDA-T) which, if it comes close to what the analysts are predicting, has a lot of upside.

As people move into high-definition, etc. that you use for satellites, they get 1.5-3 times more stuff in a satellite, this is all good news for this company. Also, they are launching their own satellite of microsatellites which allows tracking of ships. This has a high recurring revenue of high margins. Earnings have expected growth of 20% for 2013 and 22% next year. Target of $4.

Changed management a couple of years ago to the better. Thinks it can go a long ways from here. Management really knows what they are doing and are very focused.

(Top Pick Jan 13/12, Up 45.87%)

Getting rid of a lot of costly government contracts and have picked up new ones. A premier satellite provider. Company sitting on cash with some earnings (5 cents). A merger takeover target in the next couple of years. No debt. Good value.

(Market Call Minute.) Sees a lot of upside.