The battle for space dominance is on, with a wide range of publicly traded firms looking to make their mark on worlds beyond Earth. Undoubtedly, the space stocks are exciting, with the potential to offer out-of-this-world growth potential if they can get things right. With such high stakes (and capital on the line), though, the slightest slip could bring forth horrendous downside. Indeed, it seems like space will remain the territory of speculative investors, at least for now.
Despite this, the space plays are worth checking in on from time to time. It is quite extraordinary the feats they’ve accomplished as public firms that need to keep their shareholders impressed. As choppy of a ride as the space stocks are — much like a turbulent rocket immediately after take-off — they are moonshot plays for those thrill and risk seekers out there. It’s not my cup of tea, but I continue to find the nascent, niche space market fascinating.
Without further ado, let’s dig into the space investments that have been making headlines of late.
Intuitive Machines (LUNR)
Perhaps single-handedly, Intuitive Machines (NASDAQ:LUNR) brought public attention back to the public space stocks as its Odysseus moon lander set foot on the moon’s surface last month.
The landing represents one giant leap for public space companies. That said, it was quite a turbulent ride, not just for the lander that reportedly tipped over, but also the stock, which fluctuated wildly around the time of the landing. In any case, NASA is praising the landing as a success. Though it wasn’t the smoothest ride in the world, you’d have to agree that Intuitive Machines achieved something awe-inspiring.
Despite this, investors took profits in what was a “sell the news” scenario. Only time will tell if the landing is the first of many more lunar missions. Either way, I’m not in a rush to buy the dip now that shares have finally succumbed to the forces of gravity, with shares down almost 60% from their peak on Feb. 20.
ARK Space Exploration & Innovation ETF (ARKX)
For investors who want to bet on a broader basket of space opportunities, it’s hard to look past Cathie Wood’s ARK Space Exploration & Innovation ETF (NYSEARCA:ARKX). Perhaps the ETF is the one-stop-shop play to own if you’re serious about investing in space but aren’t quite sure where to venture. Undoubtedly, all things space entail extreme levels of risk, risks that I personally wouldn’t be comfortable bearing. If you’re looking to slim down on the risk factor, though, an ETF is the way to do it.
Cathie Wood has not had a great 2024, at least so far. Her flagship ARK Innovation Fund (NYSEARCA:ARKK) is still slightly in the red over the year’s first two months and change. The ARKX shares haven’t been all too hot, either, also boasting flat performance year to date.
Looking under the hood, ARKX is home to some very intriguing plays, such as Trimble (NASDAQ:TRMB), a firm that could be vital in space-based satellite communications. But the deeper you dig into the ETF, the more confusing things get.
Strangely, Amazon (NASDAQ:AMZN) comprises around 3.4% of the fund. Earth’s richest man, Jeff Bezos, is in the rocket game with his firm, Blue Origin. But I’m not quite sure how Blue Origin’s missions will translate into gains for Amazon stock. In the meantime, I’m not so sure Amazon has plans to ship stuff up to space anytime soon.
L3Harris Technologies (LHX)
L3Harris Technologies (NYSE:LHX) is probably my favorite space stock for value investors serious about the long-term growth opportunities to be had in space.
The firm has an impressive portfolio of aerospace and satellite products, with a focus on national defense purposes. Undoubtedly, space defense is an emerging area of investment. As the military looks to defend itself from threats beyond air, land, and sea, L3Harris is a firm that stands to gain. The company also builds satellites for NASA and the National Oceanic and Atmospheric Administration.
Though not a space pure-play, LHX stock looks incredibly cheap at 33.4 times trailing price-to-earnings. Unlike many other speculative space plays, L3Harris actually has the means to grow profitability with a higher degree of predictability.
I’m calling it now: LHX stock is quite possibly the most investable way to play space today for those who are no fans of speculation, at least in my opinion.
On the date of publication, Joey Frenette held shares of Amazon. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
