A big pop from Virgin Galactic … how Luke Lango is playing it … the vast space opportunities beyond Virgin
Say it’s last Friday, late afternoon…
You’re trying to get out of the office, looking ahead to your weekend plans, when you realize you haven’t checked your portfolio in a few days.
Upon opening your account, you notice that something has changed…your balance has jumped significantly.
You scan your positions, looking for what’s different, then you spot it…
A 39% one-day pop from Virgin Galactic (SPCE).
This is what Luke Lango’s Innovation Investor subscribers enjoyed last week when Virgin Galactic announced that it had received regulatory clearance to fly customers into space.
***What’s more interesting is Luke’s Flash Alert that came last Friday in the wake of the big news…
Luke recommended that subscribers sell a portion of their SPCE position, locking in some gains.
Why? Isn’t the regulatory clearance a green light for the future?
In the big-picture, absolutely. Shorter-term, Luke’s recommendation provides a fantastic illustration of the contrast between two broad categories of investor…
The average investor reads good news about a company, then piles into the stock as it’s soaring. The more seasoned investor, who was already invested during the early stage, takes some profits off the table to de-risk the position.
From Luke, last Friday:
Buy low. Sell high.
It’s the easiest investment strategy in the world, yet very few investors accurately execute it because they get scared when stocks are falling and greedy when stocks are soaring.
Not us. And that’s why we are selling one-third of Virgin Galactic (SPCE) stock today for 75%-plus profit…
The future here is bright. But the stock is now fairly valued, and so we are shedding exposure for a huge gain.
It’s also worth mentioning that there is some short-squeezing going on here, and that won’t last; meaning, if you take profits here, you will likely have a chance to enter lower in the near future.
Luke’s prediction is spot-on so far.
Since last Friday, Virgin Galactic has given back about 23%, as you can see below.
A big congratulations to Innovation Investor subscribers for their 75% gains before this pullback.
Today, let’s revisit Virgin Galactic, the enormous investment opportunity presented by the space economy, and how Luke is playing it.
***The budding space economy will create a handful of 10X winners
Before adding it to his official Innovation Investor portfolio, Luke had highlighted SPCE for his Daily 10X Stock Report subscribers back when the stock was trading for just $15.40.
In other words, investors who acted on Luke’s Daily 10X analysis saw their position climb over 300% as of last Friday.
If you’re newer to the Digest, the Daily 10X is Luke’s service dedicated to unearthing one potential 10X stock pick every single trading day. Innovation Investor is where Luke provides buy and sell recommendations for his favorite innovative companies with hypergrowth potential.
Here’s more from Luke describing his Daily 10X service:
My team and I are looking at all of the most explosive investment opportunities in the stock market today, filtering out the bad ones, and delivering the good ones to subscribers in a short, 1,000-words-or-less brief that you could read while brewing your morning cup of coffee.
Virgin Galactic was one of our stock picks, because we believe that space tourism will be a huge business one day, and more broadly, we believe that it will kickstart the emergence of a multi-trillion-dollar Space Economy.
In Luke’s original Daily 10X
profile of SPCE, he highlighted the company’s two spaceships… its plans for a third… its unprecedented space milestones over the past two years… and Virgins’ potential three-phase growth narrative. Given all these tailwinds, Luke went on to include SPCE in his Innovation Investor service.
Now, none of this bullishness has changed. Virgin Galactic still has enormous potential. What has changed is Virgin’s price. And as Luke pointed out to his Innovation Investor subscribers, SPCE is now fairly valued, which is behind his suggestion to lock in some profits.
So, for the moment, let’s look beyond SPCE. After all, the investment potential from the space economy is vastly greater than just a ride into the cosmos.
Back to Luke:
Space tourism is just the start…
Soon enough, we will mine asteroids for more usable and drinkable water, as well as for precious metals…
We will create space-based solar farms that can produce significantly more solar power per square foot than Earth-based solar farms…
We will build data centers in space for 24/7 global connectivity…
We will create space-based cellular networks…
In the Space Economy – as is true in space itself – the opportunities are endless.
Those opportunities start today. Virgin Galactic’s breakout is the world’s “wake-up” call – and it’s the first of many “calls” that will happen over the next 12 months.
***Another space play that hasn’t exploded yet in price
Back in March, we highlighted another space stock that Luke has presented to his Daily 10X subscribers. And while fundamental momentum continues to build for this company, its stock price hasn’t shot the moon yet.
It’s a tech leader that’s been around for decades, benefiting from a key relationship with one very special customer – the U.S. government…which gives it a massive advantage.
Here’s how Luke describes it:
One simple reality about space is that one of its biggest investors and users is going to be the U.S. government.
That’s because space unlocks a whole new era of surveillance, defense, and warfare that the government deems necessary to improve the security and well-being of the United States.
Think things like aerial drones for surveillance and intelligence… satellites for asset-tracking and space-based communications… and aerial-based missile defense systems.
Those things are already being broadly used by the U.S. government – and investment in them will accelerate exponentially in the coming years as the underlying technology improves, costs come down, and putting drones and satellites in space becomes much more feasible.
Who makes all those drones and satellites?
The leader is a $3.4 billion space tech company by the name of Kratos Defense & Security Solutions (KTOS).
Luke writes that Kratos has been around since 1994. In that time, it has established a reputation as being a low-cost provider of high-performance space tech solutions for national security.
Kratos manufactures low-cost, high-performance drones, satellites, microwave electronics, missile defense systems, etc., and sells those solutions to the U.S. government and certain allies.
This has been a tailwind for growth. But this growth is about to ramp up substantially…
Back to Luke:
…Kratos’ growth trajectory is kicking into overdrive right now…
The company has won multiple contracts with the U.S. Navy and Air Force over the past several months. The order backlog has ballooned to $922.2 million, while the bid and proposal pipeline now sits at $9 billion.
That’s why management is guiding for 11% revenue growth in 2021, and analysts are targeting 15% revenue growth in 2022 and 18% revenue growth in 2023.
Despite this, Kratos’ stock is trading only 3% higher than when Luke highlighted the company. We don’t expect this to last.
Here’s Luke putting this price into context:
This growth acceleration comes at the same time that Kratos is worth just over $3 billion – or about 3X 2022 sales estimates.
Relative to many space tech companies, that’s an absolute steal.
It turns out that one high-profile analyst believes Kratos is a steal – Kathy Wood, the fund manager behind ARK Invest, one of the most successful investment shops in the world today.
Her space exploration ETF gives Kratos as a 6.6% weighting, making it the third largest holding in the fund.
Wrapping up, we’re seeing a trillion-dollar industry being created from nothing. These opportunities don’t come along often. Fortunately, you’re at ground zero today.
A final congrats to Daily 10X and Innovation Investor subscribers on their gains.
If you want even more space investment options, click here to check out the Daily 10X. As the opportunities present themselves in the coming months and quarters, Luke will be on top of them – presenting them to 10X subscribers.
Here’s Luke on that note, which will take us out today:
Because we are so bullish on space and because many of the names in this space are being slept-on by Wall Street, we believe that there are actually dozens of space stocks out there with 10X-plus upside potential.
We will be featuring all of them in the Daily 10X Stock Report in the coming months.
So, click here, tune in, and wait for the next 10X space stock pick.
Have a good evening,
Jeff Remsburg
