John ZechnerMDA Ltd.MDA.TOTOP PICKDec 30, 2022

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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He's been buying this all along. It bottomed at $6 and is now around $8.50. They're like the arms dealer in the old space race--making components in satellites. They're very well positioned. Are generating cash flow and raised full-year guidance. Delivered a good beat last quarter. Their valuation will expand. Satellites will continue to launch so there will be demand.

Arms dealers of the space race. So well positioned, great growth profile. 20% annualized growth rate. In a growth area, and these guys make the nuts and bolts. Decent valuation, positive free cashflow. No dividend. 

Still likes it despite the disappointment. Haven't missed numbers. They're still expecting 25% cashflow growth over the next 3-4 years. Potential for takeout.