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7 Space Stocks and ETFs to watch

PUBLISHED Dec 16, 2021, 1:16:39 PM        SHARE

img
imgChaster Johnson
Why Space?

So you’re probably wondering: “how do you make money in space?” That’s a good question because to be honest, some of the opportunity is speculative. But to give perspective, you may have wondered how video streaming would make money fifteen years ago during the age of DVDs. Or how online shopping could make money twenty-five years ago. As innovation continues to grow, space will become the next lucrative frontier. Today, companies are already earning billions launching satellites into space. Our cell phone technology relies heavily on the satellite array in the sky right now. Space tourism is currently in its infancy, but its easy to see space being a vacation destination for you and me in less than twenty years. Why is that? Because the technological innovations in rocketry is increasing exponentially. You can measure this exponential explosion in the reduction of cost per unit weight launched into space. Did I convince you? Well then here are seven investments for you to watch.

Virgin Galactic (SPCE)

Virgin Galactic (SPCE) is all about the glamour of Space! Their goal is to grow revenue through private space tourism and research. With an established space port in New Mexico, Virgin Galactic is set to have regular revenue generating flights in early 2023. Their stock price has been under pressure because their competition, Blue Origin, keeps successfully sending tourists into space. The latest celebrity was Michael Strahan, a morning TV personality and former NFL player, and four paying customers. If Virgin Galactic can keep to their 2023 schedule, I can see this as an opportunity. If they keep pushing out their schedule, I’m afraid all the chips might leave the table and head for Blue Origin.

Astra Space Inc. (ASTR)

Astra Space Inc. (ASTR) is a pure launch play. Their plan is to be the cargo shipper of space. They were the first space launch company to be listed on the NASDAQ and have numerous private and defense sector contracts announced. These contracts look to be with the new U.S. Space Force. Testing for these contracts completed successfully over the summer and they are looking to launch their first commercial launch early 2022. If they can execute these launches successfully, look to see a change in course for the stock. The stock price has been beaten up all of 2021.

Lockheed Martin (LMT)

Alright, I only half sold you on space. You’re feeling like you don’t want to go all in on a pure space company. If you want a strong, diversified technology manufacturing company that has a big hand in space, Lockheed Martin (LMT) is the company for you. We’ve been talking a lot about satellite launchers, but Lockheed Martin is the satellite manufacturer. They are the owner of Sikorsky, one of the largest military helicopter companies in the world, and also one of the largest producers of hypersonic weaponry. These are just a small part of Lockheed Martin. The stock has been muted this year with little relative movement but independent of the stock market Lockheed will continue to grow through its manufacturing innovation.

Northrop Grumman (NOC)

Who in the world makes all this stuff that’s in space? The answer is Northrop Grumman (NOC). They do everything space. Global space security, check. Satellite modules, check. International Space Station solutions, check. Satellite repair, check. If you want a company with their hands all over space but also diversified working on Stealth Fighters and Aircraft navigation systems, then Northrop Grumman is the stock for you.

Maxar (MAXR)

Alright, Lockheed Martin and Northrop Grumman were a little too diversified for you. You want all space all the time! Then Maxar (MAXR) is (kind of) the company for you. They are much more into space, with decades of experience building satellites. However, if you also want to get into the surveillance of fisheries, Maxar does this too. Maxar is a technology and manufacturing conglomerate that is heavily into space development.

Ark ETF Trust - ARK Space Exploration & Innovation ETF (ARKX)

I will now quote the profile of Ark ETF Trust - ARK Space Exploration & Innovation ETF (ARKX) off of etfdb.com:

“…ARKX’s management fee might seem pricey in the ultra-low-cost world of passive ETFs, but it’s cheap for active management, especially when the manager delivers significant alpha.”

Being that ARKX is down nearly 10% for year makes this quote a complete joke. I’m going to avoid ARKX and save myself an active management fee.

Procure Space ETF (UFO)

The ETF that is about space craft. You want to really get into satellites, this is the ETF for you. Buyer beware, check out what UFO is holding before you buy. UFO holds companies like Dish Network and Sirius Radio while also holding Virgin Galactic. Though the stock ticker is interesting, the companies this ETF holds may not be something you’re interested in investing in. The price of UFO has been volatile this year but relatively unchanged since the ETFs inception in 2019. If you’re looking for a good Space ETF, I’m not sure if this is the one.

BONUS: SpaceX Starlink IPO Spin-Off IPO and Blue Origin

Blue Origin and Starlink are not publicly traded yet, so you can’t invest in them right now unless you are in Private Equity. However, their activity does affect the results of their peers in the public markets, so it’s a good idea to keep an eye on them. For example, Blue Origin’s successful launch of Michael Strahan and William Shatner into space has really put pressure on Virgin Galactic to get someone into space themselves. Sidenote, William Shatner now holds the record as the oldest person to be in space.
Starlink is a satellite internet provider that I personally like because if they can successfully get open internet to people trapped in countries that suppress speech then that could really help billions rise out of oppression. But getting back to business, Starlink is already getting orders for their satellite internet. If they can get the quality of this internet service improved, they could completely transform how we receive internet. This SpaceX spin-off could have huge potential, so keep an eye out for a potential IPO sometime in the future.

I/we have no positions in any asset mentioned, but may initiate a position over the next 7 days

**POSITION UPDATE**

NOC, Buy

Northrop Grumman...
Return: 28.96%

NOC, Buy

Return: 28.96%


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