Opinions
Christine Poole
Maxar Technologies
MAXR-T
WAIT
Feb 13, 2019
The company has gone through a lot of change and the market has reacted negatively. She got out of it as their satellite business was slowing. They acquired a US digital imaging business and now they are much more leveraged. They also had one of their satellite's recently was lost, which will negatively impact their earnings. A new CEO will be hopeful, but she does not have a good sense of their earnings growth. She wants to wait.
$7.900
Stock price when the opinion was issued
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TOP PICK
Strong demand is one of the catalysts. Restructuring story. New management. Good progress on balance sheet. Uptick in satellite orders. Free cashflow should be positive going forward. Good multiple. Earth imaging for government. Yield is 0.14%. (Analysts’ price target is $33.30)
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PAST TOP PICK
(A Top Pick Oct 18/19, Up 275%) He kept picking away it and still owns it. A few years ago, this stood at $80, but fell to $10 when they a great deal to buy DigitalGlobe which increased the company's value though levered the balance sheet. MAXR does satellite imaging and analytics for defence and many other industries. It has a 10x operating cash flow, so it's still not expensive. This could hit $100.
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HOLD
This was $80 a few years ago, then an acquisition of Digital Globe (made a lot of sense) made investors worry about the balance sheet, but that's improving as they pay down debt. The DG deal married DG's orbital satellites with Maxar's existing software to analyze that data from outer space, which is important to military defence and urban planning. MAXR has had a huge dip this year, but he's holding on. Is trading at only 8x operating cash flow.
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HOLD
He continues to hold but took a little money of the table because of a substantial move. It is space exploration plays. Their cap X spending will come down in the coming year. He thinks it is positioned right and is not extended. We need space data for so many uses. There is a growing use for it. For the longer term he thinks you should stay with it.
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BUY ON WEAKNESS
The space sector is promising. Still owns this and bought more with the weakness. With digital globe acquisition, they have married the space area well. Low level orbit satellite structure is promising. There are companies that need their data. Best positioned to combine data and put it in a good format. The valuation is still good. You are seeing SPACs flowing money into the area.
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