Trader’s Narrative

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You’ve probably never heard of MacDonald Dettwiler & Associates and would therefore be forgiven for assuming it is a stuffy law partnership somewhere. In fact MDA’s most established line of work is building robotic space-bound surveillance systems. But they have another line of work which is lighting a fire under their stock right now: information products for real estate transactions.

What everyone is salivating over is the coming implementation of so-called Home Information Packs in England. By June 1st, 2007 before a seller can put their home on the market, they must provide a comprehensive report on their property. This is to to make the transaction as transparent and as smooth as possible. You can read more about the details of HIPs in this Guardian article (gazumping?).

So thanks to the British government, a brand new market has been created almost overnight. And MDA is there to take advantage of it. Of course, they are by no means the only company in this fresh sector. But they are arguably the one best positioned to take a majority share.

The kicker is that if the introduction of HIPs goes well in England, not only will other countries like Wales and Ireland follow, but the English government may very well take this as a cue to ‘outsource’ other similar processes. That might be why MDA’s stock has gone ballistic.