MDA Space Ltd. (MDA.TO)

Valuation looks rather expensive. If you own, don't sell. Capitalizing on movement to greater private enterprise in space. Gaining a lot of business. Some engineers he knows think a lot of this company, and that its products and services are critical components of the space race.

EPS of 28c beat estimates of 17c; revenue of $282M beat estimates of $277M. EBITDA of $55M beat by 3%. Backlog is $4.6B. Revenue and EBITDA guidance was raised, and the company says it will be cash flow positive in Q4. Sales growth should be 30% with the new guidance. Higher work volumes and stronger contributions from satellite systems and robotics helped the quarter/outlook. Things continue to look good here. 
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The story is still intact, still likes it. They are the arms dealer in the space race. They keep launching into space. Margins continue to rise and demand remains strong.

The space economy is booming in telcos and space travel. The only pure-play space company. Lots of runway with double-digit EBITDA growth over 4-5 years. Their technology can launch satellites flexibly as the cost has fallen. He bought it last spring as their backlog grew a lot and their PE declined. One of his biggest holdings. Not a take-out candidate.

Bought it in the spring and a recent top pick. The space economy is booming (telcos and space travel). MDA is the world leader in the space space. A lot of room to grow; expects double-digit EBITDA growth over 5 years. They have the best technology to launch satellites as the cost of that has fallen.

His top pick in the past. This offers rare growth in the industrial space. Expects 25% earnings cash flow growth over 5 years and likely a 8x cash flow.

Recent winning of billion dollar space contract from Canadian government very profitable. Stock performing very well the past few years. Demand for products remains strong, at a profitable rate. Expecting further growth in the years to come. Stock price under valued in relation to peers. Would recommend holding for the long term investor. 

Global tech leader, only pure-play public space technology. Cost of launching satellites has come way down. Well positioned in satellite systems, robotics, and geo-intelligence. $3.3B backlog. Clear visibility for 20-25% EBITDA growth per year for at least the next 3 years. Stock's come down to compellingly attractive levels.

It holds a dominant position in space technology. It also received a big contract with Telesat - more than $2 billion. It is a growth story.

Very strong company that is a leader within the space satellite sector. Capex investments are starting to payoff as cash flow begins to rise. Expecting company to win large government contracts. Runway for space exploration limitless. Excellent pick for long term investors. 

Global leader in the field. There's a new "space" economy, and MDA is well positioned to capture a good share. $3B  backlog. Clear visibility for 20% revenue and EBITDA growth per year for the next few years. Recently added to TSX Composite, underfollowed stock. 9x EBITDA, really cheap considering massive growth potential. No dividend.

Forecasts call for sales growth of 23.5% and EPS growth of 21.1% in 2024. MDA has displayed nice momentum following a solid Q3 and has a large backlog of business. Additionally, MDA has started to see cash flows begin to increase. MDA is up 59% in the last year and a  valuation of 17.9x forward earnings is decent considering the strong momentum in the last year and forecasted outlook. We are comfortable adding to MDA at the current levels. 
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The Telesat contract really kicked them up. (Telsat contracted MDA for a major project.) MDA was able to lower the costs which allowed Telesat to raise financing for their project. Happy to continue owning this.

Last week, the Telesat deal surprised everyone. Nobody saw it coming. MDA developed a technology that really dropped the costs, so they were able to raise the financing. That deal was a feather in the cap, but MDA's demand will grow anyway. He likes the story and is hanging on, not selling any shares.

EPS of 8c mostly matched estimates (8.2c); revenue of $196M was 1% better than expected. EBITDA of $40.4M was 11.5% better. Results were good, and guidance was raised. MDA also won a very large contract which adds significantly to earnings/revenue visibility. The stock has had a very big run; at 28X earnings it cannot be called cheap, but we think momentum can continue. We can't comment on position size but think it is buyable for aggressive investors, though we would not expect the same pace as recent gains. 
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