This fund manager loves MDA Space

First Avenue Investment Counsel CIO Brian Madden said MDA Space (MDA Space Stock Quote, Chart, News, Analysts, Financials TSX:MDA)  is well positioned to benefit from growth in the global space economy.

Speaking on BNN Bloomberg’s Market Call on Feb. 27, Madden noted the company, formerly known as McDonald, Dettwiler and Associates, has re-established itself in public markets and is now focused on satellite manufacturing and space technology.

“They make satellites,” Madden said, adding that MDA is positioned to capitalize on what it sees as a $1.5-trillion and expanding global space economy, driven by national defence modernization and next-generation telecom satellite deployments.

He highlighted the company’s Aurora satellite platform, which he described as cost-efficient and designed for higher production volumes. MDA currently has a book-to-bill ratio of just under 3x and an order backlog of approximately $5.5-billion. Madden also pointed to an early-stage pipeline of roughly $20-billion in potential opportunities developed through longstanding relationships with governments and corporates.

The stock pulled back in the fall following the loss of an EchoStar contract and speculation around potential risk to a Globalstar agreement. Madden said third-quarter results and subsequent contract announcements helped restore confidence.

MDA is scheduled to report Q4 results next week.

“We expect good results,” Madden said, adding he anticipates continued contract wins supported by the company’s technology and market position.

Shares of MDA have gained 61.4% over the past 12 months and 177.4% over five years. All nine analysts covering the stock rate it “Buy,” with a consensus price target of $47.06.

The shares closed Feb. 27 at $39.55.

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