4 stocks to bet on as space travel grows in importance

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Space has great potential since man landed on the moon in 1969 and America emerged victorious from the space race. Although things were lukewarm in the late 1990s, over the past decade falling manufacturing costs, the injection of private funds, technological advancements, and growing interest from state-owned enterprises have given a new lease of life. life in space exploration. In fact, the commercialization of space in this decade and to come is expected to create a “multi-trillion dollar space economy” and also a mega trend for risk-ready investors. According to a Morgan Stanley report, the global space industry could reach more than $ 1 trillion by 2040.

The space race continues

Here are the reasons for the boom in the space economy. First, technology has been an obstacle that has held back human interest in space exploration. However, in recent years, advancements in propulsion technology, nanotechnology, and artificial intelligence (AI) have opened up space like never before. Second, the falling cost of space travel, which may be linked to technological advancements. Last, but least, are the existential crises facing the human race, from overpopulation to resource depletion and climate change. In fact, researchers believe that the commercialization of space and colonization will give humans more space and resources and, in turn, help reverse climate change.

Last year, the National Aeronautics and Space Administration (“NASA”) sent astronauts to the International Space Station (“ISS”) for the first time since 2011. In addition, private companies like SpaceX launched 26 space missions record, a company to test flights to market Earth’s lower orbital programs and deliver packages to the ISS. Virgin Galactic Holdings, Inc. SPCE, a space tourism company, successfully completed the first two glides with its SpaceShipTwo spacecraft.

Why will the momentum continue in 2021? First, the market for satellite imagery is booming as the demand for landscape and terrain data for autonomous vehicles has grown drastically, thanks to the advancing era of autonomous driving. Additionally, communications companies are investing millions of dollars to provide high-speed connectivity to remote locations around the world. The Biden administration also supports the growth of the space economy. President Joe Biden has adopted two of Trump’s flagship initiatives, the Artemis program, which is NASA’s effort to return astronauts to the moon, and the sixth branch of the armed services, Space Force. Therefore, NASA can move forward with major human exploration in deep space that includes plans to land astronauts on the moon by 2024.

IPOs boost space

The initial public offering and mergers continue to boost the space industry. On March 25, Genesis Park Acquisition, a special purpose acquisition company, merged with Redwire, a space infrastructure provider. The merger allows Redwire to continue technological development and join others in the pure-play space economy. The earlier acquisition of Genesis Park raised $ 166 million when it went public in November 2020.

What else? Ark Investment Management launched the ARK Space Exploration & Innovation ETF (ARKX) on March 30, a space-themed ETF that invests at least 80% of its assets in domestic and foreign companies involved in space exploration. . The ETF has 39 purely fun space companies like Iridium and Virgin Galactic.

4 best stock picks

The space industry continues to thrive as humans wonder what exists trillions of miles away and seek a chance to participate in space tourism. According to a Research and Markets report, the space industry was valued at $ 360 billion in 2018 and is expected to experience a CAGR of 5.6%, reaching $ 558 billion by 2026. The demand for nano-satellites and Reusable launchers systems continue to drive growth, particularly in the United States which is emerging as the largest shareholder in total global spending. Here are four stocks to tap into in the booming space economy. All stocks carry a Zacks # 2 (buy) rank. You can see The full list of current Zacks # 1 Rank (Strong Buy) stocks here.

Raytheon Technologies Corporation RTX is an aerospace and defense company. The company designs products for defense and commercial space operations. Raytheon also designs, produces and supports cabin interiors, communication and aviation systems, oxygen systems, food and beverage preparation systems, storage and galley systems, toilet and wastewater management systems, etc.

The company’s expected profit growth rate for the current year is 32.2%, compared to an expected decline of 3.1% for the Zacks Aerospace – Defense Equipment business. Zacks’ consensus estimate for that company’s earnings for the current year has been revised up 0.8% in the past 60 days.

Teledyne Technologies Incorporated TDY provides instrumentation, digital imaging, aerospace and defense electronics, as well as technical systems. The company’s sensors will power, detect and help analyze the chemical composition of the surface and minerals during the March 2020 mission. Teledyne’s expected profit growth rate for the current year is 7.8% , against a projected decline of 3.1% in the Zacks Aerospace – Defense Equipment industry. Zacks’ consensus estimate for that company’s earnings for the current year has been revised up 0.4% in the past 60 days.

Maxar Technologies Inc. MAXR provides ground intelligence and space infrastructure solutions. In addition, it offers geospatial information, applications and analysis services. The company’s expected profit growth rate for the current quarter is over 100% compared to the projected more than 100% decline in Zacks’ satellite and communications industry. Zacks’ consensus estimate for that company’s earnings for the current year has been revised more than 100% up in the past 60 days.

NVIDIA Corporation NVDA operates as a visual computing company. AI accelerates space exploration and NVIDIA leads the frontier. Using noisy 120GB biosensor data collected from analog NASA missions, teams can train AI models to simulate various medical conditions and quickly counter the effects. The company’s expected profit growth rate for the current year is 33.7% compared to the projected profit growth of 27% for the Zacks Semiconductor – General business. Zacks’ consensus estimate for that company’s earnings for the current year has been revised up 15.1% in the past 60 days.

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