Space ventures triumph amid trading scene: Thales, Airbus, Amazon, BAE Systems, and more tout space exploration's promise
Riding the Cosmic Wave: An Investor's Guide to the Booming Space Economy
By Nick Gallant (*Editor's Note: This article is not financial advice.)
© VICTOR HABBICK VISIONS/SCIENCE PHOTO LIBRARY/GETTY IMAGES
Historically, aeronautics, defense, and space exploration have formed a technological trio. This trio is marked by its symbiotic relationship, where advancements in one area often find their way to another[1].
Take, for instance, advancements in civil aeronautics, which lead to the development of propulsion systems, advanced materials, and navigation software. These technologies find their way to military and space applications[1]. Similarly, defense spending, particularly in Europe, is on the rise amidst growing geopolitical tensions[1].
The New Frontier: Space Exploration
The allure of space has driven technological innovation, with suppliers sharing technologies between supersonic aircraft and launchers[1]. Research and development (R&D) in this sector is continuously pushing boundaries[1]. Notable players in this field include SpaceX, Blue Origin, and Rocket Lab[2].
On the European side, companies like Airbus, Safran, and Thales play significant roles[1]. European startups are also emerging, eager to capture a piece of the cosmic pie[4].
Galilee: A Thematic Indicator Leading the Way
Galilee, an investment product that focuses on the theme of space exploration, has been performing exceptionally well[1]. Its performance over a 12-month period as of April 25, 2023, outpaced a broad stock market index such as the MSCI World[1].
The space exploration theme has a price-to-earnings ratio estimated at 22 times expected results[1], making it gradually regain appeal as investors recognize the growth prospects of the sector[1]. This theme offers a balance between growth and value stocks, often represented by more affordable industrials on the stock market than their high-growth counterparts[1].
Investing in the Final Frontier
For those looking to invest in the growing space economy, there are several directions to take[3]. Here are a few top space exploration stocks[3]:
- Rocket Lab USA (RKLB)
- Industry: Aerospace & Defense
- Market Cap: Approximately $9 billion
- Business Overview: Known for its Electron rocket, Rocket Lab focuses on cost-effective small satellite launches. It's developing the Neutron rocket to expand its capabilities[2].
- Virgin Galactic Holdings (SPCE)
- Industry: Aerospace & Space Travel
- Overview: Offers commercial spaceflight services for individuals and government agencies. The company is developing new spaceships and has reduced expenses, maintaining a strong cash position[4].
- Lockheed Martin Corp (LMT)
- Industry: Aerospace & Defense
- Overview: While not exclusively in the space exploration sector, Lockheed Martin is a major player in the aerospace and defense sectors, contributing significantly to space projects.
- Smaller Players
- Companies like BlackSky (BKSY), Redwire (RDW), and Spire Global (SPIR) are smaller players in the sector, offering potential for higher returns due to lower valuations[2].
Beyond individual stocks, investors can also explore exchange-traded funds (ETFs) focused on space exploration[3]. For example, the AMC Thematic Galilee - Space Exploration ETF allows investors to invest in the 50 most representative values of the sector according to Galilee's proprietary index[3].
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Sources:
- The Conquest of Space Enters a New Era: The Sector is Booming. (2023, April 10). Momentum. Retrieved April 26, 2023, from https://www.momentum-invest.com/la-conquete-de-l-espace-entame-une-ere-nouvelle-le-sector-est-en-plein-essor/
- 5 Space Stocks to Buy as the Market Remains Highly Volatile. (2023, March 21). Nasdaq. Retrieved April 26, 2023, from https://www.nasdaq.com/articles/5-space-stocks-to-buy-as-the-market-remains-highly-volatile-2023-03-21
- Space Stocks to Buy for ETFs and Individual Investors. (2023, March 21). Investopedia. Retrieved April 26, 2023, from https://www.investopedia.com/articles/etfs/08/space-stocks.asp
- Virgin Galactic Holds "Buy" Rating as Stock Moves Higher. (2023, April 12). Zacks. Retrieved April 26, 2023, from https://www.zacks.com/stock/news/621155/virgin-galactic-holds-buy-rating-as-stock-moves-higher
- Nick Gallant's article suggests that advancements in civil aeronautics can influence science, technology, and space-and-astronomy, as they often find applications in military and space technologies.
- The space exploration theme, as represented by the Galilee investment product, has been outperforming a broad stock market index, making it gradually regain appeal as investors recognize the growth prospects of the sector.
- For those looking to invest in the growing space economy, Rocket Lab USA (RKLB), Virgin Galactic Holdings (SPCE), Lockheed Martin Corp (LMT), BlackSky (BKSY), Redwire (RDW), and Spire Global (SPIR) are top space exploration stocks to consider.
- Exchange-traded funds (ETFs) focused on space exploration, such as the AMC Thematic Galilee - Space Exploration ETF, offer investors a way to invest in the 50 most representative values of the sector according to Galilee's proprietary index.
- Geopolitical tensions have led to an increase in defense spending, particularly in Europe, which could potentially impact the finance industry by driving technological innovation and investments in the space economy.
