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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I have a question about Badger Daylighting Ltd.
Hi Peter:
I worked for a multinational O&G for many years. Daylighting / Hydrovac has established itself as the new normal for the vast majority of maintenance related excavations. Although it's not necessarily the operatrional efficiency that drives the equation. It's risk management. Operations and Maintenance groups reduce any related uncertainty regarding potential underground contacts by either performing the entire excavation by hydrovac or identifying any existing underground infrastructure by spot hydrovacing to visually locate it prior to excavation by mechanical methods.

Peter: Do you believe it is inevitable that Badger will be taken over by one of the larger construction service providers in the next couple of years? Seems to me, there's just too much potential cash flow involved.
Read Answer Asked by Roderic on December 12, 2012
Q: Thanks for detailed analysis on Badger Daylighting. A few questions about the company:

(1) You mentioned that the high growth of the industry has attracted numerous competitors. Is the Badger Hydrovac design a proprietary technology that Badger owns exclusively? Other than reputation and engineering expertise, does Badger have other advantages over competitors?

(2) Many companies are now forecasting slower future growth and toning down their previous ambitious expansion plan. How do you see this trend affecting the future growth of Badger? Would you still recommend Badger at the existing stock price (approx $26)?

(3) In your report you say Badger's payout ratio is below 25%. What's considered high and low for this type of company?

Thanks!
Read Answer Asked by Dennis on July 28, 2012