Maxar Technologies (MAXR.TO)

Reported pretty disappointing numbers and the guidance is troubling. Everything is kind of on track, except it is going to happen a year later. They are setting up a special structure in the US so that they can bid on US Government contracts, and that is still on track. Numbers are going to be suffering for the next few quarters because they are hiring new people in order to sell into the US government. Next year is a much more transitional year.

Satellites. Low earth and GEOs. As the Euro has come down, some European companies have become more competitive. But this company can now bid on US government contracts. The pipeline is decent. There are good growth opportunities.

This has been a bit of a frustrating stock over the last year. Nothing seemed to work for them. However, fundamentally it is really a strong company. They have strong 5-year fundamental metrics behind them, like ROE, revenue growth and income growth. It seems to be stalling out lately. This is good, but you might have to wait another year for it to really take off.

This company has a new structure that they have been developing in the US. It allows them to become a US company in terms of being able to compete for US military contracts, and yet they are still able to retain their Canadian domicile for their head office and taxation. This hasn’t been approved yet, but is supposed to come later in the fall. The stock is cheap, because it has been a really poor year for satellite awards. Dividend yield of 1.75%.

(Market Call Minute.) This is going to be a beneficiary of any kind of Trump win in the US and increased spending on defence.

Risk reward on this is really, really good. They sort of represent Québec city within their business plan in what they do. Brought in a new CEO, and have also moved along the procurement process with the US military. Dividend yield of 1.73%.

Looking at it from a P/E ratio side, it is very reasonable at about 12 times. ROE is about 20% which is pretty nice. Technically the stock has been on the weak side lately although it is struggling at about $77-$78, a critical level from his point of view. If it can hold up there, then you can get a rebound. If it fails, it is going to $61.

It has gone down since May when it was a Top Pick. There was some weakness in the satellite business as far as contracts coming up. They have signed some good business lately and they seem to be steadying up in the low $70s. Very well-managed and a high ROE company. If you didn’t buy it in May, this is a more timely time to get into it. Very inexpensive at 10-11 times earnings. 23% ROE.

He has been looking at it. It has come down a long way because they are not getting good order flow this year. There is more competition in the sector. There are worries about their growth in the short term. He would buy it in here or next quarter.

It pays a safe dividend. There have been challenges in that it is a lumpy business and orders are not coming through right now. 3 to 5 years is the way to look at it because earnings will be flat for a while.

It is on his radar. It is a very lumpy business. They are getting a lot of deals on the satellite front. They aren’t going to make as much money this year. It is difficult to predict the earnings. This is when you want to buy this kind of stock, when the backlog is thin. Wait for a better entry point.

Has this in his model portfolio that he puts out for clients. Had a pretty bad week with the release of earnings. They missed revenues and they missed earnings. Investors are forgetting this is a chunky business. They get large contracts. Sometimes there is a timing issue on when they recognize revenues from those contracts. Currency comes into play as well and there are big swings in currency. He thinks the valuation is pretty attractive right now. Stock was above $100 not long ago. There are very, very good earnings growth expected with the Loral acquisition a couple of years ago. Now that they may do another acquisition, there is certainly potential to increase earnings growth. Started to get US defence business. A very, very attractive industrial company.

A great company. The chart is looking quite attractive. Has a dividend yield of about 2%. They haven’t announced any satellite wins other than 1 this year. He wants to invest in great, solid companies that generate free cash flow with good ROEs at a good valuation when the backlog has really come off. This is exactly what he is seeing on this right now. It is close to the top of his buy list.

Doesn’t think we are in a real estate bubble. The engineering/construction business continues apace, and will continue to be even stronger in the US, where this company has exposure.

(Market Call Minute.) A technology company and there has been a little bit of reaction to an industry contract that they didn’t get. Long-term return on equity is excellent.