Tuesday, December 5, 2023
Stocks To Buy

The 3 Best Space Stocks to Buy Now: September 2023

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Space stocks may have fallen back to earth. But a select few still offer out of this world opportunities. For example, according to Barron’s, space activity between the earth and the moon could be worth $10 trillion by 2050. There’s even the potential $65 billion space tug market, which involves moving satellites around, moving them out of orbit to burn up in the atmosphere, or even repairing them. So, there’s more to get excited about than just human space travel. In fact, here are three space stocks you may want to consider today.

Rocket Lab (RKLB)

Rocket Lab (NASDAQ:RKLB) is a $2.6 billion aerospace company, which engages in the development of rocket launch and control systems for the space and defense industries. So far, the company’s Electron rocket, which is the only reusable orbital-class smart rocket, has deployed about 171 satellites and put small satellites into Earth’s orbit.

Even its Photon rocket could be exciting, with management noting it could travel to Mars by 2024. We should also note that its HASTE (Hypersonic Accelerator Suborbital Test Electron) program just signed a contract to launch four missions. Even better, Rocket Lab recently signed a deal with NASA to deliver the agency’s climate change research mission, PREFIRE, to low Earth orbit in 2024.

With earnings, the company just posted Q2 2023 EPS of a 10 cent loss, which was in line with expectations. It also saw revenue of $62 million which was up about 12% year-over-year (YOY), and beat expectations by $260,000.

Leidos Holdings (LDOS)

Leidos Holdings (NYSE:LDOS), a $13 billion Leidos Fortune 500 technology, engineering and science solutions and services leader, is also an essential part of the NASA program. In fact, LDOS creates and sustains some of the 284,000 pounds of supplies and parts needed on the International Space Station.

In its most recent quarter, the company posted Q2 2023 EPS of $1.80, which beat expectations by 23 cents. Revenue of $3.8 billion, up 7.7% YOY, beat expectations by $70 million. Net bookings totaled $2.9 billion in the quarter, representing a book-to-bill ratio of 0.8. As a result, the backlog at the end of the quarter was $34.2 billion, of which $8.3 billion was funded.

In addition, the company raised revenue guidance from a range of $14.9 billion to $15.2 billion from $14.7 billion to $15.1 billion.

ARK Space Exploration & Innovation ETF (ARKX)

If you just want to diversify among top space names at less cost, there’s always the ETF route. Look at the ARK Space Exploration & Innovation ETF (BATS:ARKX), for example. With an expense ratio of 0.75%, the ETF invests in orbital aerospace companies, sub-orbital aerospace companies, enabling technologies companies and aerospace beneficiary companies.

Some of its top holdings include Trimble (NASDAQ:TRMB), Iridium Communications (NASDAQ:IRDM), Kratos Defense & Security (NASDAQ:KTOS), L3Harris Technologies (NYSE:LHX) and Teradyne (NASDAQ:TER). Also, while 2023 has been another bumpy year for the ETF, it still ran from a January low of $12.26 to a high of $15.64 before pulling back to $14.15 a share.

Again, with an ETF, you get to safely diversify with dozens of hot industry names at a low cost. For example, with ARKX, you’re paying $14.32 a share. Or, you can pay $97.75 for Teradyne but only gain exposure to Teradyne.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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