I couldn’t agree more. To be clear, I don’t think anyone should interpret this sentiment as down ramping. CDA is a quality company, and I am confident in the medium term we will be back to $8+ but that could take 12-24 months. I am in for this ride and looking to average down sub 3.50 and will spend 2023 accumulating and hopefully averaging down further. Along the way we should get some reasonable divs but maybe not as good as last year. The macro-economics are working against the SP. Other than that, I think this will be a good time for the company. I work across the defence and public safety sectors, and this is a time of record investment globally. If not because of the geopolitical uncertainties, it is because of the challenges brought by climate change and the need for public safety organisation to harden their arrangements to allow more coordinated responses, greater interoperability, yada, yada, yada. That means better command, control and communication systems. The challenges globally in geopolitics and climate change are good for CDA. Probably except for the metal detection business but I really have no insight into that.
Here is an idea out of the box, I think CDA needs to diversify further around its core and foundational capability which is electronics engineering into industries that are on the cusp of exponential grown. I am thinking about battery storage, EV charging, solar inverters, etc. In the next decade, this country and many others will electrify. Even though EV has had a slow start over the last decade, it is likely to gain momentum in the next decade. I think CDA need to make acquisitions into this market to position itself for this future. I think of a business like RFT with a market cap of 52 mil. They are really well positioned. They are a wholesale supplier to Tritium in the US with an order back in Feb for 20 mil (USD) worth of EV charging units. They recently booked an order to supply a Portuguese company i-charging which is their first significant retail sale for 22 mil (USD) in Nov. There will be more to come in EU. This is a business that last year had a total revenue of 16.3 mil (AUD). Current SP is 0.038 and declining because of the same macroeconomics. Now, I know I will probably get hosed down for suggesting this, but I think that a company like this would be a great fit for CDA. CDA are going great, but they need to continue to diversify into growth markets.
Ok, send it!
(20min delay)