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I'm Megan Edwards for InvestmentPitch.com
Investment firm Canaccord Genuity has updated its buy recommendation on COM DEV International,
which trades on the Toronto Stock Exchange under the symbol "CDV".
Following the release of solid second quarter results, analyst Robert Young reiterated his
buy rating, increasing his one-year price target from $4.35 to $4.75, a 36% premium
to the $3.49 price at the time the report was issued.
With facilities in Canada, the United Kingdom and the United States, COM DEV manufactures
advanced subsystems and microsatellites that are sold to major satellite prime contractors,
such as Lockheed and Boeing, government agencies and satellite operators, such as the Canadian
Space Agency.
The equipment is used in communications, space science, remote sensing and defense applications.
The company's majority-owned subsidiary, exactEarth, provides satellite data services.
COM DEV reported $55.2 million in revenue, up 10.2% year of year and 5.6% quarter over
quarter, in line with Canaccord's estimate of $55.9 million.
Gross margins of 26.7% were also in line with Canaccord's estimates, as were adjusted earnings
per share of $0.06.
The revenue split between three market segments was 47 % commercial, 34% civil, and 19% military.
Order backlog at April 30, 2013 was $149 million, of which the company expects to convert approximately
61% into revenue during the balance of fiscal 2013.
"The second quarter of 2013 delivered solid results, with continued strong gross margins
in our equipment business." stated Michael Pley, CEO of COM DEV. "Subsequent to our quarter-end
we have seen a significant pick-up in announcements for new satellite orders and we maintain our
outlook for growth in revenue in fiscal 2013."
Analyst Robert Young stated, "With a leading growth profile and exactEarth service revenues
growing to profitability, we now expect COM DEV to trade at a premium."
The shares are currently trading at $3.60, and with 76.4 million shares outstanding,
the company is capitalized at $275 million.
As we stated, this $3.60 price is well below Canaccord Genuity's target price of $4.75.
For more information, please visit the company's website www.comdev.ca or contact Gary Calhoun
CFO at 519-622-2300 ext 2826 or email gary.calhoun@comdev.ca.
The investors relations is handled by TMX Equicom. Please contact Craig MacPhail at
416-815-0700 ext 290 or email cmacphail@tmxequicom.com.
For more information about Canaccord Genuity or to obtain a copy of their research report,
contact your nearest Canaccord Genuity office. Their branches are listed on their website
at www.canaccord.com.
I'm Megan Edwards for InvestmentPitch.com For more video news, and to view our disclaimer,
be sure to visit our website www.investmentpitch.com. This video is for information purposes only
and it is not a recommendation to buy or sell any securities