Q: Do you feel NOA has a durable moat in that it’s massive heavy equipment located in remote areas of the world make it difficult for competitors to enter?
5i Research Answer:
NOA has over 70 years in operations, and has recently made a large acquisition of MacKellar Group, which is expected to boost sales by 40% to 50%. Its competitive advantages include being a low-cost operator (90% of maintenance occurs in-house, internally remanufacturing components at a lower cost), it has established indigenous partners which is essential for the majority of requests for proposals, and a $3B backlog for Q4 2023. We would consider it to have a sizeable moat, and we think the name looks fairly attractive here.