Investment Q&A

Q: Very disappointed by your reply yesterday to my question which looks like a plain dismissal, as you didn't utter a word on the second part of the question on industrials, while making it private as to avoid embarrassment.

This is a public question.

Jacques IDS

Q: What’s your thoughts on today’s earnings and future outlook….

Q: I am wondering what Canadian companies are poised to benefit from an increase in spending on armaments by Western governments, in response to rising tensions across the world. Mining stocks could be of interest, but I'm mainly wondering about manufacturing companies.

Q: Equal weight with the noted companies. Would like to add a 6th with equal weight as well. Will set and forget for 10+ years. Can you please provide 3-4 possible compelling options. Ty.

Q: What is your outlook for the year ahead for MDA? I am considering adding to my position in this stock.

Q: Hi !

I am looking for an industrial stock for my TFSA. Strong growth in a short period of time is the objective.

What do you think of Target Hospitality (th-q), Vertiv (vrt-n), Preformed Line (plpc-q), MDA Ltd (mda-t), Doman Bldg (DBM-t) ?

Any other suggestion ?

Gratefully yours,

JD IDS

Q: I need to fund my annual RRIF withdrawal soon. Of the 5 companies listed, could you please arrange them in order of which to sell considering future upside possibilities?
Thank you.

Q: Hi 5i,
Thanks for your very useful/helpful answer to my recent question about TSAT. Now I'd like to ask a similar question about MDA:
Could you dive into MDA's recent quarter and provide your opinion in general, and also specifically regarding whether you think anything useful is revealed about the financial aspects of the nascent Telesat/MDA/Spacex arrangement associated with MDA's contract to build LEO satellites for TSAT, and also the benefit to MDA of other irons it has in the fire (e.g. Chorus).
Thanks! Peter

Q: Regarding Peter's great question on Telesat and MDA, I too have been looking further into these companies and did not see a response regarding Lightspeed and potential revenue. All I have found so far is:
"Telesat Lightspeed has the potential to transform global satellite and terrestrial communications industries, dramatically increasing the Company’s addressable market from approximately US$18 billion to approximately US$365 billion and significantly expanding its growth potential."
** from the companies Prospectus November 16 2021
and from https://spacenews.com/telesats-leo-constellation-fully-funded-after-manufacturer-switch/
"Telesat is targeting a 30% return on investment from Lightspeed, which is seeking a slice of an enterprise and government connectivity market the company estimates would be worth about 200 billion dollars around 2025."
"Telesat expects the total cost for 156 satellites to be around $3.5 billion, when factoring in launches and other expenses, including the ground systems and user terminal technology that would also be used for the 42 follow-on satellites."

Q: Good morning 5i,

I’ve been reading up on the Telesat/MDA story and find it fascinating. I wonder if it could also be lucrative for a small investor such as myself?

From reviewing the financials (to the limited extent I understand those documents) and other materials relating to MDA, my impression is that it presents a real investment opportunity. It does real business and it appears from its recent contracts that its revenues over the next few years could rise significantly. At its current revenue base it appears its debt is well covered and its balance sheet looks healthy.

Telesat, to me, is less clear. It seems the recent announcement that MDA will build the satellites for the Telesat Lightspeed project at significant savings to the previous plan is propelling the recent steep increase in share price. But beyond that euphoria, is the company on solid footing?

The MD&A of March 2023 states:
“After decades of developing and successfully operating our geosynchronous orbit-based satellite services business, we are now poised to revolutionize the provision of global broadband connectivity by developing what we believe will be the one of world’s most advanced constellations of LEO satellites and integrated terrestrial infrastructure, Telesat Lightspeed.
Leading into 2023, we remain focused on increasing the utilization of our existing satellites, the development of our global Telesat Lightspeed constellation, and identifying and pursuing opportunities to invest in expansion satellite capacity all while maintaining our operating discipline.”

Nowhere though have I been able to find any prediction of the revenue that will accrue to Telesat from deployment of the Telesat Lightspeed constellation. A service I subscribe to notes that future earnings can’t be reliably calculated by extrapolating past data or using analyst projections (there aren’t any) and it doesn’t look like management has offered anything either. Who are Telesat’s customers and what are they going to pay for getting aboard the Lightspeed train?”

Telesat’s balance sheet appears highly leveraged and its debt isn’t well covered by operating cash flow. If Telesat Lightspeed is a truly transformational project I’d have expected to see something, somewhere, discussing the money it will make for Telesat and how it will reduce the debt and increase shareholder value, but as far as I can tell – nothing but crickets.

I would greatly appreciate your advice regarding MDA – are there risks/concerns that I might be overlooking?

Regarding Telesat, do you know of any revenue projections that I’ve overlooked and, if not, is it odd none are being made? Also, any other comment you have regarding Telesat would be appreciated. Is something really big about to happen here? It seems the process should be far enough along, given that billions of dollars have been committed by lenders, governments and the company itself, to answer that question. But maybe not, and maybe it's all still highly speculative ...?

Thanks, 5i, and please deduct as you see fit.
Peter

Q: Please comments on the earning. Is it considering cheap valuation to add at current price level?

thanks!

Q: What is your outlook for MDA at these levels? Is the recent billion dollar contract adequately factored into the current share price?

Q: I have been following MDA waiting for a turnaround. I think you have been positive on future potential, but the trend has been down. Do you see any sign of change now?

Peter

Q: hey guys hope all is well i would like your opinion on this one and if you feel it is too expensive .It has i think a very unique niche and seems to have insider interest thanks as always

Q: Peter; I’m up nicely on MDA and getting nervous over the way this “ market” oscillates- every inflation number either scares it or helps it. Is it worth holding or take the money and run? Thanks.
Rod

Q: Peter; Any news you see to account for the volume jump- and price? Thanks
Rod

Q: Hi 5i,

Would appreciate your thoughts on the recent offer by Advent International buy MAXR.

As a share holder should I consider this a done deal and sell? or is it worth hanging onto the shares in case there is a competing offer from another bidder for MAXR?

If the MAXR does ultimately get bought out, is there a similar company you could recommend to replace it in my portfolio?

Sorry for the multiple questions. Please deduct credits as you see fit.

Thanks in advance,

Greg C.

Q: Looks attractive at these prices. Is it considered cheap with good upside in the future?

Q: both stocks have been particularly weak in this crazy market. Is there anything new on either and when are the next quarterly reports available. Which would you prefer for growth, ignoring risk. Thanks

Q: Dear 5i,
In regards to MDA. Approximately how much %revenue comes from government of Canada type contracts? What %revenue would you guessestimate this to be 5 years from now. Should one be concerned with companies that rely heavily on government contracts?