MDA Space Ltd. (MDA.TO)

A small cap, and small caps are coming into vogue right now. Up 35% in the last year. Robotics, satellite systems, and geo-intelligence technology to the space industry. Elon Musk wanting to put up more satellites falls into this company's bailiwick. Aerospace is having its time to shine. Worth owning.

He owns HEI and CAE instead.

Lots of volatility. Part of the Golden Dome -- no $$ amount associated with that, but that they're part of it is a good endorsement. Needs to diversify its client base. Business is doing well, generates cashflow. A mission-critical company in Canada, with opportunities in Europe. Exposed to the right themes of defense and national security. A good hold for the next several years.

(Note the short-ish timeframe.)  Unfortunate news with losing EchoStar contract, and worry on Globalstar contract (this one has abated). Continues to add new projects and new contracts.

He got stopped out on the initial drop. Waiting for consolidation after tax-loss selling, and it's approaching a point for re-entry.

Excitement in the space race again. Price spike fueled by the contract backlog and sector hype. Crash came from timing risk, debt worries, and valuation reality check. Fundamentals remain solid. Next leg depends on almost-flawless execution. Margins are healthy. Long-term setup looks constructive, but has to deliver.

Wait to see execution on backlog before considering a position.

Technically failed after it hit $40, so he moved to the sidelines. Other things to do right now.

(Note the short timeframe.)  Bad luck this year. When it lost that EchoStar contract it broke technical levels, and he got stopped out. Still really likes the business, which will be significantly bigger in 10 years. He watches it very closely for a chance to get back in.

Their last numbers beat the street. There have been delays with a project, but overall MDA will do well. They have a strong backlog. Trades at 13x PE 2026, not expensive. It helps that around the world, countries are thinking of defense. MDA executes well. If Global Star overcomes its delay, MDA could grow their top and bottom lines.

MDA got caught up in the speculative frenzy over and shares have returned to Earth. But at this valuation it looks interesting. Doesn't know the company fundamentals, and doesn't follow it. Will be volatile when the space sector gets hot and not.

A struggle. He owned his twice this year. Hard to own. Very volatile this year. The current collapse concerns him. It took Feb-June to bottom out, so it may take several months for this to bottom out. The chart shows a Triple Waterfall, so a third down leg could lie ahead. He wouldn't return to this until it bottoms out and shows relative strength.

EPS of 35c beat estimates of 34c; revenue of $409.8M beat estimates of $403.2M. EBITDA of $82.8M beat estimates by 6%. Guidance was affirmed. EBITDA margin rose 20.2%, 0.9 points above estimates. Backlog was $4.39B, lower than estimates ($5.13B). Revenue rose 45% from last year. This was a good quarter and the stock has responded, but investors are still concerned about potential contract losses. We would be fine buying a partial position today. 
Unlock Premium - Try 5i Free  

Thank goodness they didn't buy it, but still on his aggressive watchlist. Craig (the fundamental guy) likes it, though it does have volatility. If it manages to find support right where it is now, they'd get serious on it. It has to stop going down and base. "Up is good, down is bad." 

Don't buy here, but don't sell either until it breaks. If it breaks $20, probably time to get out. Yes, you could use it for tax-loss selling and wait the 30 days imposed by CRA, as it may not move during that time (hard to say).

There was excitement over defense spending, given announcements from Trump and NATO. But MDA's space business is longer-term and higher-risk. Their technology is satisfactory and will win future contracts. If you're down, hold. But MDA depends on government contracts, which is risky.

Speculation that may also lose the Globalstar contract. Based on stock's reaction, a big surprise for the street. Not a lot of visibility on its outlook. Don't step in until it next reports (a couple of weeks), and see if there's more clarity on future prospects.

He lightened up earlier this year, but is now coming back to it. Lost EchoStar contract. Latest rumour is that Globalstar contract is also at risk. That's 2 x $2B contracts, massive. Market's assuming the worst right now.

He looks at the other side. All the telcos are now offering dirct-to-cell satellite, a growth area. More infrastructure spending was detailed in the recent federal budget. A Canadian-domiciled company. Pretty good backlog. He bought some this morning, legging into his positions.

Bought it on the dip of the lost EchoStar contract. Well-positioned to capitalize on the $1.5T global space economy. Two aspects:  telecommunications/mobility and defense. Both segments are growing, though defense may get a boost with more federal funding. 

Order book has compounded at 54% annually since 2020. Management sees 25-30% revenue growth for the next few years. Fairly undemanding multiple of ~12x EV:EBITDA. No dividend.