Three space stocks for adventurous investors
Micah Walter-Range, index creator for the world’s first space ETF, selects three of his favourite space stocks to buy now.
Media coverage of space often focuses on billionaires such as Elon Musk, Jeff Bezos or Richard Branson and their private space companies. But the number of publicly-traded space-industry stocks is growing quickly. Some companies have been in the market for decades, and a new wave of companies is going public this year, mostly through special purpose acquisition company (Spac) transactions.
Space is an inescapable part of life, whether you check the weather forecast or watch a film using satellite television. The underlying index for the Procure Space UCITS ETF in Europe (LSE: YODA) and the US (Nasdaq: UFO) reflects the diversity of the space industry. These stocks, all in the YODA ETF, showcase the way we will communicate, navigate, and travel in future.
Extraterrestrial internet connectivity
Globalstar’s (NYSE: GSAT) shares jumped by 60% in a day in August following rumours that Apple would announce direct-to-satellite connectivity for the iPhone 13 in partnership with the satellite-communications provider.
Globalstar promptly returned to more typical levels after there was no mention of this feature at Apple’s launch event two weeks later. But the saga attracted investors’ attention to related space stocks such as AST SpaceMobile (Nasdaq: ASTS), a company seeking to create the first space-based 4G/5G cellular broadband network for mobile phones.
A young company that began publicly trading in April 2021, ASTS has partnered with mobile-network providers including Vodafone so that customers can switch between ground towers and satellites as needed. As the data economy grows and consumers demand ever-present high-speed connectivity regardless of location, there are clear opportunities for space systems to improve internet access worldwide.
Navigating the space market
Countless products and services are now aware of their location in some capacity, thanks to space. America’s GPS satellites and Europe’s Galileo satellites, along with other systems, have changed the way individuals and businesses navigate the world by providing a signal that is freely available for device manufacturers to use.
Garmin (Nasdaq: GRMN) is a longstanding player in this sector, with products that include GPS-enabled smartwatches and other consumer wearables, navigation systems for automobiles, and specialised equipment for maritime and aviation customers. Garmin looks poised to benefit as services become more networked and location-orientated.
To the moon and back
Virgin Galactic (NYSE: SPCE) receives much media attention, but it is still worth a look. The company has milestones to meet before it begins regular passenger flights, but it remains the only publicly traded company working to carry people to space on a commercial basis. Its strategic partnership with Boeing provides exciting opportunities for the long term. These could include rapid transit between locations on earth via space, in addition to quick tourist flights.
Investors and spaceflight passengers alike will need strong stomachs – the stock tends to make sharp turns as the company makes progress or experiences temporary setbacks. It is rocket science (and engineering), after all.