Investing

Investing Idea - Dividend Growth

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  • Dec 11th, 2017 10:37 am
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Sr. Member
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Sep 4, 2007
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Thank you very much Rod for your new website!
Deal Guru
Aug 2, 2010
11031 posts
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rodbarc wrote:
Oct 10th, 2017 11:49 pm
I've updated the list, as there are no more MDA - It has been renamed to Maxar Technologies (TSX:MAXR). I consider it undervalued, with good estimates to grow:

Image


MAXR has a good analyst coverage, and the consensus is aligned with the graph above: Now that MDA and DigitalGlobe combined to create Maxar Technologies, it enhances their business further, expanding its scale in satellite imagery, adding recurring data services revenue, and increasing exposure to US government programs. DigitalGlobe also adds $8B Enterprise Value to Maxar, and a high margin revenue stream. Upper management had some changes, as it's expected with these merging activities.

There are high expectations with Maxar now: According to NSR, the market for satellite earth observation and value-added services is expected to grow at an 8% 10-year CAGR and to be worth US$5.4 billion in 2025. Information products and data represents the majority of the market opportunity (67% of the total), while downstream segments such as big data analytics and value-added services presents as new opportunities to be explored. Market growth for earth observation data is driven mainly by Defense and intelligence demand. US global Defense spending for EO data has been growing at a 13% CAGR over the past five years, with the NGA being the single largest procurer of imagery to support Defense applications.

Maxar now will be able to have a balance regarding data and services versus hardware, which was the dominant business for MDA. According to one firm covering Maxar, with increasing scale in geospatial data services, MAXR will have the ability to pursue larger programs and address more complex mission requirements. The acquisition of DGI adds a roster of large commercial customers that leverage location-based satellite imagery, such as BP, Mapbox, Facebook, Apple, Google, Microsoft and Uber. More importantly, DGI increases MDA’s exposure to US government space programs. The US government is the largest consumer of space-related services with over $10 billion in opportunities. DigitalGlobe will expand MDA's access to the US government, with the company providing 90% of the foundational imagery to the US government through 80 contract vehicles. Pro-forma MDA’s exposure to data and services increases from 7% of total revenue to 25% of total revenue.

Post-acquisition MDA will enjoy a leading market share in the earth observation market, 54% up from 9%. The market is somewhat of a duopoly with Airbus having 20% and the rest of the market fragmented amongst smaller players and new entrants. MAXR will be uniquely positioned in the market as the only operator of large satellites that offer both optical and radar capabilities with very high resolution and high revisit rates.

I believe this acquisition will bring significant advantages to MAXR, which is currently undervalued in my opinion.


Rod
Rod, I am curious where you obtained the above information (other than fastgraphs) that forms the basis of your analysis and how long it took you to find it?

Thanks,

eonibm
Deal Guru
Aug 2, 2010
11031 posts
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rodbarc wrote:
Oct 10th, 2017 11:57 pm
My website went live. Below you'll find a presentation for a great investing book by Frederik Vanhaverbeke, and how effective investment philosophy and investment intelligence are consistent among the investors presented below. Also, it's paramount the importance of behavioral finance to develop temperament.

Enjoy!

https://boostyourincome.ca/excess-retur ... investors/


Rod
Nice work! Must have taken a while to set up. I see you used a Divi theme. Did you program it yourself?

While it looks really good and provides a lot of useful information, other than the converts from here who have come to understand your investment philosphy and see some 'real world' examples of your successful, albeit tailored to your preference for dividends, strategy over time for others just happening upon it by surfing it might be difficult to acquire significant subscriber traction. That is because you are just another website touting investment advice and a totally anonymous one at that. You provide zero disclosure about who you are unlike the many other websites, most of which back their information up with a real person standing behind it with a name and someone who can therefore be held accountable. Therefore, to the websurfer out there it does necessarily engender much confidence in your website. You are just another totally anonymous purveyor of advice. Why should anyone place more faith in your views than any of the other many websites out there touting investment strategies, especially those who are not afraid to reveal themselves?

I am not trying to be Debbie Downer here (I'm not even female!) and am in no way trying to poo-poo the confidence that RFDers (me included) have in your investment acumen. I am sure many from here will start following your website and many RFDers will subscribe and you will earn some revenue. However, I think you need to look at your website from the point of view of someone surfing around looking for investment advice. I realize you want to stay anonymous but that is precisely the reason many non-RFD people will pass you by. They have no reason to listen to you than any other totally anonymous source.
Deal Addict
Jan 20, 2016
1433 posts
554 upvotes
Houston, TX
rodbarc wrote:
Oct 10th, 2017 11:49 pm
I've updated the list, as there are no more MDA - It has been renamed to Maxar Technologies (TSX:MAXR). I consider it undervalued, with good estimates to grow:

Hmm, tried to search using TSX:MAXR - nothing on Google or Yahoo finance
Google says Macdonald Dettwiler & Associates Ltd(TSE:MDA) for MDA)
Yahoo - Maxar Technologies Ltd. (MDDWF)
Other OTC - Other OTC Delayed Price. Currency in USD

??
Make the Trudeau drama teacher again!
Sr. Member
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Sep 4, 2007
567 posts
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Orange Key holder in…
All those sites are too slow to update their link for the new MDA. Gee, even MDA's own site still shows MDA.TO.

If you find MDA, they are all Oct 6's closing price.

But at Sedar, you will see it is listed under Maxar Technologies Ltd.
Deal Guru
Aug 2, 2010
11031 posts
2269 upvotes
FYI, Joel Greenblatt, who authored one of the books you highly recommend in your 'Resources' link and also is referred to in the 'Excess Returns: A comparative study of the methods of the world’s greatest investors' presentation on your website, as having 40% returns over 20 years (ie more than DOUBLE Warren Buffet's - as if!) has never had his results independently verified by anyone. I even emailed him once to ask for proof of it, as have many other investors and he won't provide any proof. It's just his own proclamation that that is what he achieved. What makes his results all the more incredibly suspect is that he returned all his money to his investors after 20 years and instead started a free website and wrote a few books instead? Really now? That was more lucrative? Many suspect his returns are bogus and the fact he can't prove it certainly lends a ton of credence to that. Unfortunately, like many things in this day and age, his returns have been so oft repeated in the media that people take it as gospel.

I could say I achieved the same results without any proof too and likely many will believe me to. After all, they believe Joel Greenblatt's fake news.

This is not to take anything away from many of the other well known investors who do provide independent proof of their results.
Deal Addict
Dec 6, 2006
3817 posts
707 upvotes
Toronto
asa1973 wrote:
Oct 11th, 2017 10:46 am
Hmm, first time I see that some ticker is on TMX but not on Google/Yahoo...that's weird :(
The symbol (and new company name) was just active since yesterday, due to MDA's merger with the other company. I'm sure Google/Yahoo will have it, just need to wait a day or 2 to update.
Deal Addict
Dec 6, 2006
3817 posts
707 upvotes
Toronto
TSE:GS Gluskin Sheff + Associates Inc, big drop 7-8%, close to 6% dividend. Anyone following it? Good buy now?


EDIT: Due to management change? (My thought only) Perhaps fear of the departing VP/portfolio manager may bring along some of the high-profile clients along to whichever new company s/he's going to?
http://www.newswire.ca/news-releases/gl ... 35033.html
TORONTO, Oct. 10, 2017 /CNW/ - Gluskin Sheff + Associates Inc. (the "Company") announced today that Executive Vice-President & Portfolio Manager Jeannine LiChong has decided to pursue a new opportunity and will be leaving the Company at the end of December 2017.
Member
Feb 21, 2010
425 posts
71 upvotes
Scarborough
the guy who is leaving manages 21% of the AUM. Pretty significant I would say. Investors put money with the Fund Manager not the Fund Company. OTOH, I am sure there would be legal restrictions on how he cannot solicit business from existing clients once he moves to another firm for a certain period.

boyohboy wrote:
Oct 11th, 2017 11:08 am
TSE:GS Gluskin Sheff + Associates Inc, big drop 7-8%, close to 6% dividend. Anyone following it? Good buy now?


EDIT: Due to management change? (My thought only) Perhaps fear of the departing VP/portfolio manager may bring along some of the high-profile clients along to whichever new company s/he's going to?
http://www.newswire.ca/news-releases/gl ... 35033.html
Deal Addict
Dec 6, 2006
3817 posts
707 upvotes
Toronto
romeocanada wrote:
Oct 11th, 2017 11:52 am
the guy who is leaving manages 21% of the AUM. Pretty significant I would say. Investors put money with the Fund Manager not the Fund Company. OTOH, I am sure there would be legal restrictions on how he cannot solicit business from existing clients once he moves to another firm for a certain period.
Yeah for sure. But for high-profile clients, I'd imagine he doesn't really need to "solicit" as they'll all be aware what's happening. Now question is how "loyal" those clients are to this port manager.

It's like a hair salon I've seen... used to be very busy, then apparently the "big name" hair-stylist left and opened his own shop and just like that, that salon is like deserted these days.

That yield, tempting though...
Deal Guru
Aug 2, 2010
11031 posts
2269 upvotes
romeocanada wrote:
Oct 11th, 2017 11:52 am
the guy who is leaving manages 21% of the AUM. Pretty significant I would say. Investors put money with the Fund Manager not the Fund Company. OTOH, I am sure there would be legal restrictions on how he cannot solicit business from existing clients once he moves to another firm for a certain period.
It's a woman that is not a guy that is leaving. My experience is most clients do not leave just because a PM leaves. Also, this has happened to GS about 10x in the past, most notably in the '95 and '07 when some extremely high profile PM's left. Didn't cause a dent. Great buying opportunity if you were already interested before the drop.
Deal Addict
Dec 6, 2006
3817 posts
707 upvotes
Toronto
eonibm wrote:
Oct 11th, 2017 12:08 pm
My experience is most clients do not leave just because a PM leaves. Also, this has happened to GS about 10x in the past, most notably in the '95 and '07 when some extremely high profile PM's left. Didn't cause a dent. Great buying opportunity if you were already interested before the drop.
Perhaps wait the 3-days rule and buy on Monday? ... 6.01% yield now...

Do you recall how big of an impact (e.g. percent of accounts) back in '07?
Any words where this PM is leaving to (after December)? I can't find any info.
Jr. Member
Apr 8, 2017
119 posts
28 upvotes
rodbarc wrote:
Oct 10th, 2017 11:49 pm
I've updated the list, as there are no more MDA - It has been renamed to Maxar Technologies (TSX:MAXR). I consider it undervalued, with good estimates to grow:

Image


MAXR has a good analyst coverage, and the consensus is aligned with the graph above: Now that MDA and DigitalGlobe combined to create Maxar Technologies, it enhances their business further, expanding its scale in satellite imagery, adding recurring data services revenue, and increasing exposure to US government programs. DigitalGlobe also adds $8B Enterprise Value to Maxar, and a high margin revenue stream. Upper management had some changes, as it's expected with these merging activities.

There are high expectations with Maxar now: According to NSR, the market for satellite earth observation and value-added services is expected to grow at an 8% 10-year CAGR and to be worth US$5.4 billion in 2025. Information products and data represents the majority of the market opportunity (67% of the total), while downstream segments such as big data analytics and value-added services presents as new opportunities to be explored. Market growth for earth observation data is driven mainly by Defense and intelligence demand. US global Defense spending for EO data has been growing at a 13% CAGR over the past five years, with the NGA being the single largest procurer of imagery to support Defense applications.

Maxar now will be able to have a balance regarding data and services versus hardware, which was the dominant business for MDA. According to one firm covering Maxar, with increasing scale in geospatial data services, MAXR will have the ability to pursue larger programs and address more complex mission requirements. The acquisition of DGI adds a roster of large commercial customers that leverage location-based satellite imagery, such as BP, Mapbox, Facebook, Apple, Google, Microsoft and Uber. More importantly, DGI increases MDA’s exposure to US government space programs. The US government is the largest consumer of space-related services with over $10 billion in opportunities. DigitalGlobe will expand MDA's access to the US government, with the company providing 90% of the foundational imagery to the US government through 80 contract vehicles. Pro-forma MDA’s exposure to data and services increases from 7% of total revenue to 25% of total revenue.

Post-acquisition MDA will enjoy a leading market share in the earth observation market, 54% up from 9%. The market is somewhat of a duopoly with Airbus having 20% and the rest of the market fragmented amongst smaller players and new entrants. MAXR will be uniquely positioned in the market as the only operator of large satellites that offer both optical and radar capabilities with very high resolution and high revisit rates.

I believe this acquisition will bring significant advantages to MAXR, which is currently undervalued in my opinion.


Rod
Great analysis Rod. I was only worried from debt but as you mentioned recurring revenue is increasing which can easily service the debt

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