What is a tech stock? It used to be that a tech stock was involved in software and hardware sales. That definition has blurred since then to include pretty much any company that uses tech to scale up its distribution, including marketing companies and retailers. Technically every company with a strong digital component has become a tech stock.
The 20s will see the definition of a tech stock further blurred. Already, some investors consider Domino’s to be a tech stock. Not only that, but compared side by side with some of the more traditional tech tickers, Domino’s actually outperformed some of the best businesses of the FAANG brigade during the decade just past with growth in the region of 3,000%.
However, while the likes of Apple (technically the most “techy” business of the FAANG gang) might look less appetizing by comparison, the galloping content streamer Netflix can claim an even greater growth rate than the pizza-slinging snack shack. Disney’s greatest foe in the streaming wars appreciated by a staggering 4,000% over the course of the last 10 years, making it the best-performing stock of the S&P 500.
From snacks and streamers to outer space
The sale of Canadian space tech manufacturer MDA saw Maxar Technologies (TSX:MAXR)(NYSE:MAXR) rocket 25% last week, a trend that could now continue, albeit at a reduced angle of ascent, over the coming months and even years. Maxar has been making headlines in the last 12 months with a series of NASA-partnered developments, such as satellite servicing.
Pundits have long eyed Maxar’s debt level as prohibitively mountainous and a cause of debate, impacting its stock’s overall buyability. With its bottom line strengthened to the tune of $1 billion from the divestment, though, Maxar could finally see its fortunes — and its outlook — improve considerably. With the space industry on the cusp of explosive growth, Maxar is a key stock to buy and hold.
With analysts likely to reconsider Maxar’s outlook, general health, and overall maneuverability in its favour, investors might expect to see the space tech stock begin to trend higher. Maxar’s industry partnerships have long been one of its buying points, and with disruptive tech breakthroughs, such as the Restore-L, the company could break out as the space industry erupts.
The move will significantly bolster Maxar’s balance sheet, an area that has dogged investors in this famously downtrodden stock. Being able to wipe off a huge amount of the debt that has plagued the company will see Maxar finally turn its fortunes around and will now likely see a steady influx of positive investment activity through the new year.
The bottom line
High-growth investors have two great tech success stories in Domino’s and Netflix. Maxar has been on pundits’ radars for a while now, and with the news that it’s selling its MDA segment and wiping off a billion in debt, its potential for upside just shot up. In summary, Maxar is a strong long-term buy for access to a sector whose growth could hypothetically be as vast as space itself.
One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting...
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago - before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple, Netflix, and Walt Disney. The Motley Fool recommends MAXAR TECHNOLOGIES LTD and recommends the following options: long January 2021 $60 calls on Walt Disney and short April 2020 $135 calls on Walt Disney.