Part of being a good stock prognosticator is that you have to be humble about your wins and honest about your losses. When it comes to Virgin Galactic (NYSE:SPCE), I’ve had my share of wins and losses, recommending SPCE stock on several occasions to varying degrees of success.
When my editors asked me to write about the space company, I had to think twice before recalling the last time I wrote about Richard Branson’s baby.
It wasn’t that long ago. Nov. 23, to be precise. So, why does it feel so much longer? I don’t know. Anyway, I suggested that SPCE was an excellent speculative buy in the mid-teens in my last piece. It was trading at $17 at the time.
Well, here we are in the mid-teens, and I’m reluctant to recommend it. It’s not because I don’t believe in its business strategy. I do. It’s just that Jeff Bezos and Blue Origin seem to be winning the public relations war.
This is strange considering Amazon (NASDAQ:AMZN), one of his other companies, appears to have absolutely no concept of humanity. It’s hard to fathom that the company made those people in Illinois keep working when it knew a tornado was fast approaching.
Like Elon Musk, Jeff Bezos has a brilliant mind but seriously lacks compassion. For this reason alone, I root for Virgin Galactic. I’m tired of Jeff Bezos winning.
Ok, enough of the rant. Let’s get down to business.
The Space Company’s Latest Hire
You would think with a company trying to commercialize space flight that I would be talking about a new engineer it hired. Not quite. I’m focused on its Sep. 23 announcement that it had hired Aparna Chitale as its Chief People Officer.
“I’m delighted to welcome Aparna to the Virgin Galactic team. She has an outstanding track record building and supporting highly skilled teams across engineering, maintenance, safety, and technical services,” stated Virgin Galactic CEO Michael Colglazier.
“Aparna also brings deep experience hiring and developing top talent in global destinations around the world to support rapid growth,” Colglazier continued. “This unique background, combined with her proven ability to foster a high performance culture rooted in a diverse and inclusive work environment, will support Virgin Galactic’s ambitious growth strategy.”
It also doesn’t hurt that she worked at Walt Disney (NYSE:DIS) with Colglazier.
From November 2014 through September 2021, Chitale was the Vice President of Human Resources and Diversity at Disney Parks, Experiences and Products. Colglazier was President of Disney Parks International from 2018 through July 2020. There’s no question they would have worked together.
It’s not easy building a team, but it’s doubly difficult when it involves something as technically complicated as space flight. You make a bad hire at McDonald’s and it only costs you money and time. You make a bad hire at Virgin Galactic and it could end up costing lives.
So, having someone Colglazier can trust and respect to fill out the company roster is a huge plus for its future growth. Moreover, I believe this hiring can trickle down to its share price. Here’s why.
SPCE Stock Remains a Speculative Bet
When Richard Branson and Virgin Galactic reached out to hire Colglazier away from Disney in July 2020, I thought it was a confident move. Comparable in scope to the business-altering hire of Hubert Joly as the CEO of Best Buy (NYSE:BBY) in August 2012.
“My feelings at the time of Joly’s hiring was that he understood the service business and would be willing to seek out the talent necessary to reignite growth at Best Buy,” I wrote. “I get the same sense about Colglazier. You don’t spend 30+ years at Disney and not understand how important it is to provide customers with an excellent experience. Ultimately, Virgin Galactic’s business is all about the customer experience.”
By hiring his former colleague, it’s clear he wants to use the Disney playbook for building a customer-focused organization. When you think about it, the company’s SpaceShip Two spaceships aren’t much different than Disney cruise ships. It’s all about pleasing the customer and providing a first-rate travel experience.
However, good hires aside, I’ve always maintained that SPCE stock is not an investment you put inside a retirement or college tuition fund. It’s far too speculative.
That said, there are plenty of people out there willing to plunk down money on GameStop (NYSE:GME) despite no proof it’s got a legitimate plan to rescue the company from the retail dustbin of history.
I’ll continue to recommend Virgin Galactic as long as I think it remains a decent speculative bet. That’s especially true if it keeps making smart hires like the one it made in September.
It’s “fun money” approved.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
