Paul Cerro, CIO of Cedar Grove Capital Management, joins the podcast to discuss his thesis on Red Cat Holdings (NASDAQ: RCAT), a drone technology company integrating robotic hardware and software for military, government, and commercial operations.
Cedar Grove RCAT thesis: https://www.cedargrovecm.com/p/red-cat-rcat-trade-worth-up-to-200-prcnt
Chapters:
[0:00] Introduction + Episode sponsor: Ycharts
[2:28] What is Red Cat $RCAT and why are they so interesting to Paul
[6:26] Why is $RCAT relevant in the drone market? What is unique about $RCAT drones?
[13:29] Capabilities of $RCAT drones and how much they are selling them for (to the military) / what specifically going on with $RCAT drone that US Government is using them vs. going with commercial drone
[21:21] What is the SRR Contract and why is this a big deal
[25:40] Odds that $RCAT wins this SRR contract
[30:00] Economics if $RCAT wins the contract / what margins would look like
[33:12] Valuation: market already baking in best-case scenario in terms of them winning?
[36:17] What does the company look like if they don't win the contract / how much is Paul's bet on $RCAT winning the SRR contract vs. betting on Red Cat in particular
[40:05] Are the odds in the stock price right now that they win this contract vs. what Paul thinks the odds are that they win this contract / in Paul's opinion, what he thinks the market is missing
[45:22] Is there correlation between the NATO contract and SRR contract?
[50:39] Final thoughts
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