Space exploration and commercialization could hold huge amounts of profit for investors in the future. Here’s why the burgeoning space industry should be part of a growth portfolio based around long-term capital gains, and why Maxar Technologies (TSX:MAXR)(NYSE:MAXR) is a strong play in this exciting new space.
Space: The final frontier for growth investors
The space industry is taking investors to some amazing new places — or, at least, it will in the coming years. From space internet to off-world printing, an array of up-and-coming new industries set in space could add up to significant capital gains for early investors. However, the playing field is sparsely populated at present, with few major players currently available for stock market investment.
While two major stocks spring to mind for access to future space industries, Maxar is arguably the only company offering a pure play on the sector. Those two comparable stocks are Amazon for its Blue Origin connection and Tesla for its ties to SpaceX. Boeing also offers a direct route to space exposure, though it’s more famous (or perhaps infamous) as an aerospace play.
NASA is spearheading the return to the Moon and, along with ventures such as Bigelow Aerospace, SpaceX, and Blue Origin, represents the forefront of the rebooted space race. Investors have a key opportunity with Maxar, one of the few publicly listed businesses in the space industry space, to cream some significant upside in the coming years.
An event-driven stock with key partnerships
Maxar’s share price activity is largely driven by events. Since the slew of new deals was announced, Maxar has seen share price appreciation of a massive 70% in the last three months. However, that does not mean that Maxar is overpriced. The space tech stock still trades just below its book price, even while trading at almost 200% higher than its 52-week low.
One only has to look at Maxar’s relationship with NASA to see why it’s the best strategic play in this space outside of Boeing and other transport-based businesses. NASA chose Maxar to develop and demonstrate power, propulsion, and communications capabilities for NASA’s lunar Gateway. The decision was one of the first stages of the Artemis lunar exploration project.
NASA administrator Jim Bridenstine said of the project, “The power and propulsion element is the foundation of Gateway… It will be the key component upon which we will build our lunar Gateway outpost, the cornerstone of NASA’s sustainable and reusable Artemis exploration architecture on and around the Moon.”
In short, an investment in Maxar is a pure play on space exploration as well as an indirect investment in all of the new industries that are springing up to take advantage of our colonization of the famous “final frontier.”
The bottom line
While there are few big names in the off-world commerce sector just yet, Maxar represents the strongest pure-play pick for space-based growth. Its mix of attractive market fundamentals, room for growth, and key partnerships make it a solid addition to a portfolio geared towards capital gains.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Amazon and Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends Amazon and Tesla. The Motley Fool recommends MAXAR TECHNOLOGIES LTD.