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The good thing about technological advances is that they have democratized outer space and transformed the cosmos from a domain that government entities once dominated, thus creating new opportunities for the private sector. And without giving it a second thought, the private sector has responded vehemently. Today, investors have numerous choices when thinking about investing in space. So, as you go through your Accelerated profits review, here is how you can make money investing in any of the following space stocks.
Virgin Galactic aims to transform the world’s perception of space tourism. Richard Branson, a serial entrepreneur, founded Virgin Galactic, which has been public since a deal in 2019 that aimed to merge with a special purpose acquisition firm, SPAC, run by Chamath Palihapitiya, another renowned investor.
But the company has since experienced some turbulence as it tries to prepare its spaceship for commercial service. For example, Virgin Galactic missed its goal of beginning flights in time in July 2020 for Richard Branson’s 70th birthday.
Suppose the firm finally gets airborne. In that case, it will be a massive success since Virgin Galactic already has a backlog of over 700 individuals willing to pay as much as $450,000 to enjoy a few minutes of weightlessness. But potential investors keep wondering whether the company will ever be able to offer them that space ride. Another question is whether Virgin Galactic can offer such rides profitably as a business.
You probably know Lockheed Martin as the company behind the F-35 Joint Strike Fighter. But did you know Lockheed Martin also features an extensive space business focused on satellites and missile manufacture? The company is also part of the massive launch business through a joint venture with Boeing.
Historically, although it still has some commercial customers, Lockheed Martin has paid more attention to business for NASA and Pentagon. Lockheed Martin’s space unit exposes the company to some of the fastest-growing development areas in defense. That includes hypersonic missiles that can travel at approximately five times the speed of sound.
Although the firm had hoped to expand its space presence through an Aerojet Rocketdyne acquisition, Lockheed Martin walked away after regulators objected to the power that combination would feature. But even with Aerojet aside, space accounts for over 15 percent of the company revenue.
The 2017 merger of DigitalGlobe and MDA Holdings formed Maxar Technologies, an engineering and space technology firm headquartered in Westminster, Colorado. The engineering company specializes in manufacturing Earth observation, radar, communication, on-orbit satellites, satellite products, and other related services. Maxar is also an imagery business that counts Alphabet’s Google Maps and the Pentagon among its clients.
When last did you look at a satellite view of a location, say a vacation destination? The chances are high that you looked at a Maxar image. Imagery business is a subsector that has advanced from consolidation. Think about the war in Ukraine for a second. Isn’t it a fresh reminder about how satellite imagery is essential?
Mapping tech keeps improving, prompting commercial buyers to find new ways to use imagery. This scenario creates a potentially huge addressable market for a formerly niche business.
Looking for a relative newcomer to the public markets? Rocket Lab is another top pick; it is an aerospace and defense company headquartered in Long Beach, California, founded in 2006. The end-to-end space firm opens access to space to improve life here on Earth. Additionally, the company delivers reliable launch services, satellite components, spacecraft, and on-orbit management.
Although Rocket Lab USA focuses on launching small satellites into space, it is also investing in expanding its offering. The firm looks forward to integrating larger launches and including multiple other related services like the manufacturing of satellites.
Although it may be a competitive market, Rocket Lab USA is a low-cost investment money-making option, currently conducting commercial launches. It is putting up a real challenge on some of its would-be competitors. While space might seem risky, especially for young companies, Rocket Lab USA appears to be a potential winner with the heating up of the commercial space race.
Momentus discovered the rapidly increasing number of new space entrants leading to a lot more space junk and debris from non-functional satellites remaining in orbit and hundreds of launches. So, with such a looming problem, Momentus believes it will be the solution.
On Earth, vehicles often break down, are illegally parked, or are left stranded daily. A tow truck business takes care of these vehicles by transporting them to repair shops. With that idea in mind, Momentus intends to be space’s tow truck firm. The plan is to launch a fleet of satellites to transport other objects back into their correct orbit or out of harm’s way. Momentus is also planning to conduct in-orbit servicing, among other related offerings.
Although Momentus is an early-stage space engineering company, with others like Northrop Grumman having plans to offer similar services, the need is real. If you want to add a little space speculation to a diversified portfolio, investing in Momentus is a potential high-risk with a potential high-reward stock.
After reading this piece, you might wonder whether investing your hard-earned money in space stocks is right for you. Well, let’s face it! While space is exciting, it is also dangerous, which is the case for most stocks in today’s market. Many of these businesses feature amazing and world-changing potentials, but you also must recognize the significant risks involved.
Considering these risks and the fact that some of these space technology firms are young, you might consider purchasing into space through an exchange-traded fund (ETF) to expose you to the sector without picking one winner. Examples of space-focused ETFs to leverage include ARK Space Exploration and Innovation, Procure space, etc.
If you are an investor looking for moonshots, space stocks might be the best choice. The recommendation is to understand the risks of charting new horizons. Then keep your space stocks to a small, speculative share of a broad portfolio.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence