Com Dev International Ltd. (CDV-T)

(A Top Pick April 15/15. Up 22.27%.) This was acquired by Honeywell (HON-N).

(A Top Pick Oct 30/15. Up 8.7%.) Acquired by Honeywell.

A year ago or so, they were going to spin out Exact Earth, but pulled back from that. Now they are dividing the company up and selling off part of it. If you own, you are going to get a stub that is still going to be participating in the growth part. He thinks this company has a pretty good future here. If you own, he would recommend you vote for the change.

Received a nice bid to be acquired and are going to spin out ExactEarth. You are going to get a cash payment along with some shares in ExactEarth. Thinks ExactEarth has some good potential, but because of the time delay in terms of the takeover process and the spin out, ExactEarth will be fairly small and it might take time to get some investor attention.

Has just had an offer to be acquired. He likes this and intends to participate in it. Not too long ago they were going to spin Exact Earth out.

Being acquired by Honeywell (HON-N). He doesn’t know that it is a slam-dunk that you get $6.55 that it was valued at. Anything over $6 could leave you a few percent on the table, but that could easily go away as well. If you own, he would be inclined to get out of the stock at these levels.

A smaller cap business. He is always looking for businesses with a market cap of $400-$500 million, that could eventually get big enough to get on the TSX index. Their core business, satellites, is rock solid. They also have a business called Exactearth that is growing top line of about 50%-20% a year, which will drive EPS going forward. Dividend yield of 2.1%. Have been rumoured to be possibly strategically acquired.

This makes components for satellites. The real interesting part is that they make little mini satellites, which are used to keep track of ships. The overall background for the market is quite interesting because there are a lot of companies that are expected to release a ton of satellites in the next 5-10 years. This would be a good tuck-in for many large US companies. Currently trading at 19X forecasted earnings, which are expected to be $0.27. In the near term the latest earnings were a disappointment and were down 57% year-over-year. You are basically buying this for a possible acquisition. He thinks it should sell at about $6.

Doesn’t formally cover this, but it is in his growth portfolio because he likes their prospects. Really likes its market niche. They put transponders up on satellites and have never had one fail. You can pretty much charge whatever you want if it is not going to fail. Margins in the good years are really, really high. Announced that they’ve been approached to do a strategic transaction. That could be almost anything. It makes sense for them to sell the company to a larger player, who can get access to bigger military contracts, bigger commercial contracts and you don’t have the Canadian issue.

They were planning on divesting out of their ExactEarth ship service, but that got put on hold because of market conditions. Their core business is manufacturing satellite components, which is going to be a growing business over the next decade. In the short term it looks like there has been a slowdown in that business. Doesn’t see a lot in significant earnings growth right now. They are also under strategic review, so are trying to look at ways to enhance shareholder value. He is just happy to stand aside and watch.

This gives significant revenue outside of the US, well over 50% of their Book. They also have a hidden gem in their portfolio called Exact Earth. Thinks they will eventually IPO that and sees significant value created for investors. At the same time you have activists that are holding stock, so management is going to be forced a little to create value for shareholders. Just reported great numbers.

A really, really interesting company in terms of the commercialization of space. It has come off in this recent market. Virtually every satellite that goes up in the Western world has a Com Dev component in it. We are currently on the cusp of the commercialization of space. This company has the ability to benefit from a lot of the programs that are being proposed.

Has a very bright future. Almost picked it is a Top Pick. A satellite component manufacturer with a very lucrative niche in some of their components for military and commercial purposes. Launched their own fleet of satellites with Exactearth, where they track marine data globally. Just announced a huge deal with Harris Corp. (HRS-N) which is going to launch another 50-60 satellites. They were going to take Exactearth public and the stock ran up to $6. The IPO was pulled because of market conditions.

A small cap stock in a very specific area. They keep getting contracts. It is a little speculative because it is in a tricky area. He would not hold it because it is just a little too small cap for him. If you want a speculative hold this is a good pick.

(Top Pick May 5/14, Up 52.59%) They have really grown the Exact Earth business. The backlog has grown nicely. The value of Exact Earth is creating a huge amount of value. It will keep going up.