Want To Invest In Space? Here’s One Of My Favorite Ways To Play This Trend…
Not even Covid-19 could slow it down… $8.9 billion of private money flooded into space companies in 2020. A new annual record.
The “space race” is taking shape right before our eyes. And no, I’m not talking about tourists forking over millions for a joy ride to the outskirts of Earth. Or colonizing Mars. Sure, those efforts will likely grab the bulk of attention…
But the real space race is much different.
Let me explain…
I’ve spent the past two years researching this topic. And I’ve become convinced that commercialized space will be mainstream in the not-too-distant future. Practically every major company (particularly tech companies) will have some sort of presence in space.
It will take some time. But mark my words, it’s going to happen.
Currently, the battle for control of space is taking place over satellite infrastructure. As we speak, several companies are deploying “low earth orbit” satellites to bring high-speed broadband internet to the globe.
But aside from feeding our insatiable appetites to surf the web, stream videos, and Facetime our friends, there are other applications that have serious commercial potential.
Heavyweight companies like Amazon and Microsoft have already accelerated their space ambitions. In the fourth quarter of last year, Microsoft announced that its Azure cloud network will connect to SpaceX’s Starlink satellite internet, competing with Amazon’s AWS Ground Station and its Project Kuiper.
This is just the beginning. The implications of this are huge. And I think it’s going to be the “next big thing” that will make early investors a killing.
A Handful Of Choices, And This Is One Of My Favorites…
Billionaires like Elon Musk, Jeff Bezos, and Richard Branson are pouring significant resources (billions of dollars) into commercial space development. But behind those big names are dozens of lesser-known visionaries and startups. We’re talking about some serious brainpower here.
Right now, there aren’t a ton of publicly-traded companies in the space industry that we can invest in. They are out there, though – and I’ve told readers of my premium advisory Capital Wealth Letter about several ways to profit…
Of course, we can get nibbles of the space industry through Microsoft or Amazon. But the truth is, as far as pure plays go, it’s somewhat limited right now.
One of my favorite plays available today is a company that’s made the news from the unfortunate events taking place in Ukraine. As the Russia-Ukraine war has unfolded, it has provided a pivotal role as governments, intelligence agencies, and even the news media have relied upon its imaging satellites to track militarized convoys, attacks, and overall war progress.
I’m talking about Maxar Technologies (NYSE: MAXR).
This has been one of my favorite undercover gems. Prior to Russia’s invasion of Ukraine, it was simply filed away by a lot of analysts and investors as a “communications” company. And sure, it helps corporations and governments deliver global broadband communications, but what Maxar really is, is an innovator in Earth Intelligence and Space Infrastructure.
This space company designs, builds, integrates, and tests solutions for space-based communications, Earth observation, exploration, and on-orbit servicing assembly (think of this as fixing or building things already in space).
The company’s world-class satellites, spacecraft systems, and technology powers our urge to “conquer” space — or at least utilize space to drive innovation.
Maxar is a trusted partner for hundreds of companies and governments around the globe. For instance, if you have GPS in your vehicle, that’s likely powered by a Maxar-built satellite. It counts General Motors and Toyota as key customers. Amazon utilizes Maxar Technologies, along with the U.S. government, and defense companies like Lockheed Martin. Microsoft, Facebook, Uber, Boeing… the list goes on.
In December, SiriusXM — the streaming audio entertainment company — tabbed Maxar to build its SXM-7 satellite. This is the seventh satellite Maxar has built for the satellite radio company. Maxar built it, and it was launched in December aboard a SpaceX Falcon 9 rocket. Shortly after its launch, the satellite was up and running and providing wider coverage for SiriusXM customers. Maxar is already building SiriusXM’s next satellite, SXM-8, which is set to launch this year.
I first identified MAXR to my premium readers last year. And this year, it’s been on a tear, up 28% — and 54% since Russia invaded Ukraine on February 24th. Because of this, the stock isn’t as cheap as it once was (60 times trailing earnings, 78 times expected earnings).
But keep in mind that this is a mid-sized space company with a market capitalization of just under $3 billion. In 2021 it churned out $1.8 billion in sales. It turned a profit in 2021 with net income of $46 million, and cash flow surged 48.7% to $281 million on the year.
And despite its relatively small size, the company has been cash-flow positive for nine consecutive years, and 2022 will make it 10.
We are still in the early stages of the space race, but I wouldn’t be surprised if Maxar Technologies soon became a household name.
If you’re interested in the space theme, MAXR is one to put on your watch list. But there will be plenty of chances to profit from this trend… we’ll see a proliferation of companies coming to market in 2022 and beyond.
As I’ve pointed out before, Goldman Sachs calls space the “Next Investment Frontier.” Bank of America projects that TRILLIONS of dollars will flow into the space industry in the coming years. Morgan Stanley estimates “the global space industry could generate revenue of more than $1 trillion or more in 2040, up from $350 billion currently.”
I have an entire presentation dedicated to this topic, including how investors can profit from this major trend. Go here to get the details now.