CAE: Should You Buy This Defence Stock on the Dip?

Russia’s full-scale invasion of Ukraine back in late February shook the geopolitical world. NATO and
European Union (EU) nations have moved to back the smaller country in its vicious war with its larger
neighbour. In that conflict, Canada and its allies have shipped billions in equipment to Ukraine while also
provided crucial training.

CAE (TSX:CAE)(NYSE:CAE) is a Montreal-based company that provides simulation training and critical
operations support solutions to a worldwide client base. Its shares have plunged 34% in 2022 as of close
on September 29. The stock is down 42% in the year-over-year period.

This company unveiled its first quarter fiscal 2023 earnings on August 10. It reported total revenue of
$933 million – up from $752 million in the prior year. Meanwhile, its order intake soared 101% to $1.04
billion and total backlog increased 26% to $10.0 billion. CAE’s Defence and Security segment posted
revenue of $413 million – up 43% from the previous year. Moreover, the Defence segment booked
orders for $488 million in the quarter. The total Defence backlog jumped 35% to $5.03 billion.

Shares of this defence stock are trading in favourable value territory compared to its industry peers at
the time of this writing. Meanwhile, CAE is on track for strong earnings growth going forward. Canadians
should be hungry for exposure to the defence sector going forward, and CAE offers just that in the early
fall of 2022.