John ZechnerMDA Space Ltd.MDA.TOBUYMay 30, 2023

New CEO is trying to pivot more to the defense side, so give that time. A great pivot if they can pull it off. Challenge is that the pivot's required due to a lot of deteriorating trends under the hood. Has potential, but not a great performer over the long term.

Could be a value trap. Better opportunities elsewhere.

Opportunities should extend to at least the end of the decade. New funding going toward Canadarm. Big Arctic contract announced this week benefiting MDA and TSAT. Expanding production capacity, making acquisitions. Likely to benefit from Canada's big step up in military spending. Potential pipeline of $40B on low-orbit satellites.

Better offerings elsewhere in the space.

Huge run, drawdown is partially sentiment driven. Balance sheet still in pretty good shape. Trading ~24x PE for 2028, growing 16%. Recent acquisitions look pretty accretive. Another $1B worth of contracts. Space names have really come down the last little while. An important company to own in Canada's space complex, amid the push to build up the military sector.

Aerospace is a hot industry given the war, the Pentagon and Spacex. MDA is volatile, but what are the potential earnings, which are supposed to be $1.80 EPS in 2027, then jump to $2.08 in 2028, or 10% growth. But MDA trades at 30-50x PE. Volatile stocks like this that double or triple, you must sell half your shares.

A lot more volatile than he expected, but you have to live with that. Two acquisitions really broadened its scope. Still likes it, should continue higher.

Generally trending upward since it bottomed out in November. Big runup ahead of the SpaceX IPO. Recently starting to break down. Key level has been $45; if it holds there, that's encouraging. If not, then it's shifting into more of a correction.

An aggressive, risky play. Has a recent uptrend, but is dipping. If it doesn't bounce above the current price soon, exit this. The uptrend shows pretty big swings.

His team doesn't chase companies that hit rough waters. Project-based businesses are not the kind they tend to own. If you're down modestly, take the capital loss, apply it against your gains, and just drive on. Even if it's in a registered account (there are better uses for your capital).

Space is a hot market now and the stock is doing well. Investors are looking for the long term with this. This will be volatile.

Is indifferent to it. The trend is strong with a $60-65 analyst target with upgrades in recent years. This seems to have legs.

He expects growth to continue. Lifespan of these satellites is quite short before they start to deteriorate. Lots of ups and downs. Still reasonable valuation. Cheaper, safer way to play the sector than via SpaceX. Good, long-term story.

They won't benefit from the SpaceX IPO, which will give them more competition. MDA is profitable but too expensive at a 40x PE. Is very capital intensive. Too much hype.

Money's coming in on the trade, but what happens if that goes away?

Space industry is in early days. Prone to some disappointments. Likes it. Risk is giant IPO from SpaceX and euphoria around the group. About 20 space ETFs have launched, and they'll all need to fill positions, so demand is probably pretty strong. No problem owning as a proxy on the group.