ADA - Adacel Technologies Limited - Strawman: ASX share price, valuation, research and discussion

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Last edited 7 years ago

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#Bull Case

stale

Added 8 years ago

Large player in simulator market in US
Industry tailwinds- reported shortage of air traffic controllers in large US market. New controllers require training using simulators
Increasing proportion of revenue recurring/maintenance services. Sticky clients, historically long term contracts
Further wins for new ATC systems- specialise in over water
Strong FCF and Balance sheet
Thorney Investments is long term, substantial shareholder >30%
Takeover target?

#Bear Case

stale

Added 8 years ago

Lumpy revenue dependent on timing of sales of simulator and ATC systems
Rather opaque Management commentary on business (customer confidentiality and/or uncertainty on contracts)
3 large customers, loss of any would have impact profits
Potential cracks appearing in contracts- loss of FAA service contract to competitor
Inability to win company defining contracts e.g. NASA
Questions over lack of spend on system development/software
Insider selling: 2 directors and a KMP have sold substantial portion of their holdings in the last year
Lack of shareholding 'skin in the game' by CEO
Related party arrangements with company owned by CEO

Adacel Technologies Limited