Maxxed out on Maxar Technologies
Actionable Market Insights from Tuttle Ventures
Maxar Technologies MAXR 0.00%↑ is up 120% today, on news it is being acquired by Advent International, a global firm with $89 billion in assets under management at $53/share. According to the Wall Street Journal
Our initial 10% portfolio position in Maxar was at a price of $31.54 on March 14th, 2022 when we wrote Zooming in on Maxar Technologies:
In the detailed fundamental valuation we stated:
$MAXR currently trades at $33 but we believe it will be a $50-$55 stock once the Legion constellation is safely placed into orbit June 2022 and begins generating cash flow…
The best way to sum up this investment is we believe Maxar is selling shovels to Goldminers during the California Gold Rush. The tactics of war have evolved and Maxar will be well positioned for the future.
While fundamentally right, we lacked the patience to be able to cash in on today’s news.
We held Maxar at a 10% position for four months from 3/14/2022 until 7/7/2022, selling at a price of $26.69.
Throughout our coverage of Maxar our key areas of focus were:
Unique moat and robust technology
Backlog of over $1B in outstanding orders
Calculated burn rate of the delays in the launch of the Legion satellite project
We gave a detailed outline of these points in the 7min breakdown of the company 6 months ago on the WTFiance podcast with Anthony Fatseas.
At the end of the clip, we reiterated that this was a long term play, but failed to take our own advice.
The rationale for the sale was discussed in detail in 3 Strikes to Signal a Recession
My experience as an investment manager has been that understanding long-term economic and stock market cycles is key to risk management.
We believe a recession is coming but the US is clearly not in one yet.
In all cases, we moved out of the stock market and replaced stocks with a larger percentage of cash, cash equivalents, and a small percentage of inverse S&P 500 ETF.
Its obvious looking back that we threw the baby out with the bathwater.
At the time, the sale of Maxar had less to do with the fundamentals of the company and more to do with total macro positioning.
Going forward, we will address our core values and continue to refocus fundamental views on portfolio holdings.
Remember, our core values are that vision, courage and patience leads to successful investing.
We know that 98% of investing is waiting, the other 2% is actually buying... being patient in this situation would have yielded better results for our investors.
Thank you for reading and I am grateful and humbled to be able to learn, grow and invest alongside you at Tuttle Ventures.
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Best,
Darin Tuttle, CFA
NOTE - This is not investment advice. Do your own due diligence. I make no representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information contained in this report. Any assumptions, opinions and estimates expressed in this report constitute my judgment as of the date thereof and is subject to change without notice. Any projections contained in the report are based on a number of assumptions as to market conditions. There is no guarantee that projected outcomes will be achieved. Unless there is a signed Investment Management or Financial Planning Agreement by both parties, Tuttle Ventures is not acting as your financial advisor or in any fiduciary capacity.
Takes guts to admit when you've erred / not taken your own advice! I sold TSM near 52-week lows recently, despite being long-term bullish on the stock. That was based largely on tail risk of CCP escalating with Taiwan, after Xi's recent third term appointment and surrounding himself with yes-men. Of course, within 2 weeks headlines show that Buffett was buying and the stock rallied hard, and Xi and Biden had a lengthy meeting where Biden seemed to say no imminent risk to Taiwan. 🤦 I think trimming a bit of position may have been appropriate, but exiting entirely probably wasn't.