These three best space stocks to buy don’t just provide revolutionary space exploration technology. They also focus on other complementary industries, including the defense space and commercial flights.
Boeing (NYSE:BA), for example, is known for making planes for commercial flights. However, the company also offers various defense solutions, such as missile defense systems, satellites and more, catering to the needs of governments and militaries globally. Similarly, Northrop Grumman (NYSE:NOC) is a defense contractor providing a comprehensive range of aerospace and defense solutions. Finally, Virgin Galactic (NYSE:SPCE) is on the cutting edge of the nascent commercial space flight industry.
Importantly, many hedge funds and institutional investors — including Millennium Management and Fisher Asset Management — have significant positions in these companies. Here’s why investors should consider a stake in these best space stocks to buy, too.
Best Space Stocks to Buy: Boeing (BA)
Right now, Boeing stock trades at around $168 per share, marking its new 52-week low. However, that also means that BA stock has room to grow once the recent bad press subsides.
In particular, BA is currently one of the best space stocks to buy because it has teamed up with NASA to develop the CST-100 Starliner to transport astronauts to the International Space Station (ISS). The Starliner utilizes United Launch Alliance’s Atlas V rockets for launch. Since it is meant to be reusable for multiple missions, this will help reduce costs by allowing the spacecraft to be refurbished and launched again.
Boeing has a current ratio of 1.14, meaning it has “good short-term financial strength,” per Gurufocus. Meanwhile, its price-to-sales (P/S) ratio is 1.43. Because its P/S ratio is lower than the industry average of around 2x, BA stock could be undervalued.
Dozens of hedge funds and institutional investors see promise in this company, despite the recent chaos. One big stakeholder is Ken Fisher’s Fisher Asset Management, while Vanguard and BlackRock (NYSE:BLK) hold some of the largest positions in Boeing.
Virgin Galactic (SPCE)
Virgin Galactic is another one of the best space stocks to buy and now trades at under $1 per share. Its current ratio is 5.12, indicating a strong liquidity position with current assets exceeding current liabilities by a significant margin.
Virgin Galactic is known for offering commercial space flights for the general public at a hefty price tag of $450,000 per ticket. Right now, though, the space tourism company is working on its new spacecraft, called the Delta class, which is set to launch in 2026.
To prepare for this, Virgin is cutting costs and aiming to make its space tourism business profitable. This upcoming spacecraft is set to be a game changer for space exploration, meaning investors should keep a close eye on the firm and SPCE stock.
Top institutional investors like State Street (NYSE:STT), Vanguard and Millennium Management hold large stakes in SPCE stock. While shares may be volatile in the near future, things still appear promising in the long run due to Virgin’s institutional investments, 8.42% insider ownership and Delta class plans.
Northrop Grumman (NOC)
Northrop Grumman isn’t just one of the best space stocks to buy — it’s also an important player in the defense contractor space. As global tensions heat up, the firm’s products and services stand to be in high demand.
As far as the space industry goes, Northrop has also made important strides. For example, the firm was previously awarded contracts to develop the OmegA rocket program. More recently, Northrop was involved in a SpaceX launch this past January.
All told, Northrup is a profitable and stable company. Its revenue has grown from $35.66 billion in 2021 to $39.2 billion in 2023. Northrop also currently boasts a healthy profit margin of about 5%.
Trading at around $450 per share as of this writing, NOC stock is somewhat near its 52-week high of $496.89. Various hedge funds and institutional investors have stakes in the company, including Yacktman Asset Management.
On the date of publication, Dalton Brewster did not hold (either directly or indirectly) and 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.
