The ‘Fave Five’ Space Stocks to Buy on the Dip

Advertisement

  • The cost-effective, rapid transit to and from space will be a widespread reality within the next five years.
  • With high yields, rising rates, and red-hot inflation, among other things, many space stocks have been crushed this year. That’s because they are pre-revenue companies that derive almost all their value from future cash flows.
  • This has created a golden buying opportunity into one of the most disruptive megatrends of our lifetimes.
Zoomed out image of the Earth centered in space.
Source: InvestorPlace

[Editor’s note: This story was previously published in March 2021. It has since been updated to reflect the most relevant information available.]

[CORRECTION: A previous version of this update misstated the amount of manned crew flights Blue Origin has completed since the last time this story was published.]

This year, until recently, Treasury yields were rising. Stocks were falling, and hypergrowth stocks with rich valuations were getting the worst of it.

We’ve talked about why this is happening. We explained why the selloff is overdone and why this is a buying opportunity for long-term investors. Rates are falling. The economy is slowing. And corporate earnings are still following a healthy trajectory.

But here’s another simpler and even more important reason:

Technology hasn’t stopped.

That is, visionary entrepreneurs around the world are still formulating and pushing forward on groundbreaking technological ideas.

The genius engineers creating these technologies are still hard at work in offices and research labs across the globe. They’re continuing to turn these disruptive ideas into widespread realities.

And the innovative businesses built on these breakthrough technologies are still changing the world.

Whether it’s a 1% or 10% 10-year Treasury yield, a 20% increase or a 30% decrease in equities, it doesn’t matter…

Innovation doesn’t stop.

So when I see companies in a truly disruptive sector down drastically year-over-year, I see a huge buying opportunity.

One such sector is space stocks.

The Space Race 2.0

Source: Dall-E

Some of the smartest engineers in the world are working tirelessly to advance in-space propulsion to a place where flying to and from space will be as easy flying in between cities.

Space Race 2.0 is here.

While companies like Blue Origin, SpaceX, and Virgin Galactic were not taken seriously during their earlier efforts, they went on to launch multiple successful “test flights,” which boosted their credibility with seasoned astronauts and NASA alike. Today, over the course of six New Shepard missions, Blue Origin has successfully launched 31 people into space. Meanwhile, SpaceX made history by shuttling U.S. astronauts to the International Space Station aboard a private vessel, not a NASA rocket. This event marked the first time since 2011 that astronauts had launched to the ISS from American soil. Their progress has allowed us to safely and sustainably fly people and objects into space on a regular basis.

Over the subsequent few years, the technology will only get better, and the costs will only come down. That means the cost-effective, rapid transit to and from space will be a widespread reality within the next five years.

This will lay the foundation for the multi-trillion-dollar Space Economy to come to life.

Space tourism will rocket to life. People will fly into space as a sort of uber-expensive “Disneyland” ride…

We’ll start mining asteroids for more usable water and precious metals…

Companies will build space-based solar farms that can produce significantly more power per square foot than those based on Earth…

We’ll create space-based cellular networks and data centers for 24/7 global connectivity…

Indeed, in the Space Economy – as is true in space itself – the opportunities are endless.

Yet many space stocks have been crushed. That’s because they are pre-revenue companies that derive almost all their value from future cash flows.

Therefore, as rates moved higher and the present value of those future cash flows decreased, space stocks plunged.

And this has created a golden buying opportunity into one of the most disruptive megatrends of our lifetimes.

The Titans of Space Stocks

Many of these space companies are $50-plus billion titans of space in the making. And yet, they feature $1 billion, $2 billion, maybe $3 billion market caps today.

Higher rates don’t matter when you’re talking about companies that can increased 50-fold.

These are generational investment opportunities. Take advantage of recent weakness.

But which do I like best? Well, when it comes to the Space Economy, I have my “Fave Five.

  1. Virgin Galactic (SPCE) — the “space tourism” category-creator. By 2030, it will have dozens of spaceships flying thousands of people to and from space — a business that will generate billions of dollars in revenue at scale.
  2. Momentus (MNTS) — the space tech company partnered with SpaceX, which I like to call the “space mobility” company. Its proprietary water-propulsion technology platform will one day be the foundation upon which everything moves in space.
  3. Astra (ASTR) could become the “FedEx (FDX) of Space.” Its low-cost, highly-scalable small rockets can be launched much more frequently than the big rockets SpaceX is building.
  4. Maxar (MAXR) — a more-mature satellite company with the incumbent infrastructure, expertise, and technology to be a trusted satellite provider for all the companies looking to establish a presence in space.

Those are four of my “Fave Five” in the Space Economy. And I think all have 10X to 50X upside potential.

So, where’s the fifth?

The Final Word

First, it’s unlikely that all of the space stocks mentioned above will succeed to their fullest potential. In fact, some may even go bust!

But in a portfolio of these Space Economy companies, the winners will more than offset the losers. And the long-term gains could be enormous… especially in the fifth stock in the “Fave Five.

While the four mentioned are some of my top picks in the space economy, one stock in particular will score investors big returns — the biggest of any stock in any industry.

It’s a company that reminds me of a young Amazon (AMZN). Indeed, I think buying this stock today could be like buying AMZN stock back in 1997 — before it soared thousands of percent.

So, what’s the name of this company? Well, because the opportunity in this tiny space stock is so massive, I can’t simply mention it here. But if you’re ready for life-changing gains in one of the most opportune names I’ve ever come across, you’ll find all the key details — such as its name, ticker symbol, and key business details — here

Don’t miss out on this historic opportunity in front of us.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/hypergrowthinvesting/2022/08/space-stocks-to-buy-disruptive-megatrends/.

©2024 InvestorPlace Media, LLC