MDA (MDA TSX) We believe growth in the space economy will be robust for many years to come. MDA is a pure player in this market and we believe has some exciting years ahead. The cost to launch a satellite has declined in a meaningful way, driving more and more businesses to utilize space for communications, observation, and other activities. This fact is key to our thesis and has driven predictions that this market can grow from $400 billion to more than $1 trillion in the coming years. MDA has some big launches coming up and a backlog of $3.1 billion and recent commentary suggests they have another $17 billion in the pipeline. Catalysts will be driven by new wins, free cash flow and proof that they can execute during the high growth years. The current valuation multiple of eight times next year’s EBITDA is much to low for the growth and margins we are expecting.
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