Space Equities

A Diversified Investment Strategy

Much of our research on the Strategic Space Value Chain (“SSVC”) highlights listed space companies that have considerable niche technological advantages and experience in the space sector.

We therefore monitor and invest in some of these space stocks. 

Our focus is on innovative “Tier 1” Space Stocks, however we also monitor “Tier 2” Space Stocks; including aerospace and technical companies that have some space business units.

TIER 1

Virgin Galactic is an American spaceflight company within the Virgin Group. It is developing commercial spacecraft and aims to provide suborbital spaceflights to space tourists and suborbital launches for space science missions. SpaceShipTwo, Virgin Galactic’s suborbital spacecraft, is air launched from beneath a carrier airplane known as White Knight Two.
AAC Clyde Space offers small satellite parts, spacecraft, and space as a service.
GOMSpace is a manufacturer and supplier of nanosatellites for academic, government and commercial markets. Services include systems integration, nanosatellite platforms and miniaturised radio technology.
MAXAR owns and operates a sophisticated constellation of Earth imaging satellites; five active satellites on orbit, collecting over million square kilometres of imagery each day.
OHB SE has two business divisions, Space Systems (including fully integrated spacecraft) and Aerospace + Industrial Products.
SES S.A. is a satellite and terrestrial network provider supplying video and data connectivity worldwide; to broadcasters, internet service providers, mobile and fixed network operators, governments, and institutions.
Intelsat operates a fleet of approximately 50 satellites plus teleports, that provides the world’s most extensive and secure communications network.
Intelsat is currently undergoing debt-restructuring.

TIER 2

Space was built on aerospace, and many of these large aerospace and tech companies are making rapid progress into space, thanks mostly to their networks, expertise and scale. Their deep relationships with industry and government solidify their pre-eminence as suppliers of hardware and software, and coupled with their existing and large other businesses (e.g. commercial aircraft for aerospace companies), makes them blue chip companies. This then excludes them from being included in our Tier 1 list, as our mandate is to find ‘pure’ space stocks that are innovative.

Focus: Aerospace, communications, and robotics companies with space applications.

Example: Lockheed Martin, United Technologies, Airbus, Boeing, Avio and Safran

The Growing Demand in Space Stocks and Understanding Valuations

 

Demand for shares in tradeable space companies has risen thanks to Virgin Galactic’s listing, and many retail investors anticipate a SpaceX IPO.
However, as with any newly listed company, establishing a benchmark for a realistic valuation takes time and research.
As with any stock, understanding the fundamentals is key; space is an emerging market, yet we have to contend with conflicting, complimentary, or competing cycles of markets and alternative asset classes.
Going forward, there are two interesting developments to follow:

Space Company IPOs: When would SpaceX IPO, and can Amazon, or Facebook, spin-off their new space ventures via IPOs? What new small companies will IPO to unlock new capital sources? Is the of a SPAC (e.g. Momentus) better than a traditional IPO, or merge / acquisition?

External Research; Investment Banks, Funds and the space community release research on space related equities as part of their ongoing coverage. Morgan Stanley recently listed their idea of 20 space stocks that will lead to a trillion dollar market. There is an abundance of information on equities, yet for strategic decisions, all investors must do their own research.