Investment Q&A

Q: Down 30% on MDA, its been frustrating with the news of contract losses in the last few months, etc... Can you compare MDA vs TSAT. Would look to either fully sell MDA or trim MDA and buy some TSAT as a tax loss proxy. MDA still has good rev growth and backlog and you seem to like TSAT as you recently added more. What would you do? Thanks!

Q: Your portfolio manager(s) on the Growth portfolio have been very active lately. I own a lot of the growth but a bunch of new names have come up and I don't have room for all of them

Can you please prioritize of those names listed above which ones offer the best growth over the next 5 years.

Can you please list in order of highest to lowest conviction.

Thanks

Sheldon

Q: Current thoughts on this company? Thank you

Q: views on this company going forward...thank you.

Q: Hi,

If MDA is owned already, would there be too much overlap to own TSAT as well?

Thank you.
Michael

Q: The CEO of Telesat was interviewed on CBC radio this morning, and he discussed the Lightspeed project in detail. Previously to him, a consultant in the rural Kawartha Lakes area of Ontario described his move away from Starlink.His aversion to Elon Musk propelled him to cancel Starlink even though his replacement through Rogers isn't as good as Starlink was. I suspect this consultant isn't the only one who is disgusted with Musk, (The Ontario government's response is an excellent example.)

Now for my question: Given the toxic nature of Musk, and the need for a truly Canadian option to Starlink, would now be a good time to start to accumulate shares in TSAT? In our case, this would increase our exposure in the Telecom sector, and get in on the ground floor of what sounds like an exciting project.

Thanks as always for your insight.

Q: Hello, what are your thoughts on this company at current price valuations and its prospects over next five plus years.

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: Hi 5i,
Could you dive into TSAT'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 underpinning the Lightspeed LEO deployment.
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: A question on Telesat
What are your thoughts on the recent news and run up in this stock... I have always been interested in this and MDA and others in the space sector. Can you provide and updated view on Telesat considering the MDA contract and huge cost savings and specifically the TAM for the LEO satellites seems to be Massive.
Also what other companies would be classified as competitors specifically for Telesat's focus on non-consumer enterprise, government, aviation industries? Starlink is eventually going to offer those services but they focus on residential currently. Thanks!

Q: Hi,

Given the recent news on Telesat Lightspeed, what are your views on the company for a longer term hold (say 5 years or more)? Do you see further upside after the recent share price increase?

Thanks
Paul

Q: What do you think of TSAT at these seemingly low prices?

Thanks,

Q: The conversion merger of Loral and Telesat has finally been completed and what is your view of the merged company.