Growth investors have a tough decision to make right now. Should they trust the trends that have emerged during the pandemic, or try to second-guess the market?
Alternatively, growth investors can conjure up a post-pandemic scenario. The next step is to identify which currently overlooked names and sectors might thrive in such an environment.
Personally, I would place a super long-term bet on the space industry. It’s rich with mineral wealth and could see the revenues of many terrestrial industries multiplied overnight. While space mining isn’t here just yet, a breakthrough in technology could see an explosion in industry and commerce.
Tech stocks such as Maxar Technologies are a play for the systems that take humans into space. From a related angle, Boeing and Lockheed Martin satisfy a similar thesis. Mineral extraction and infrastructure will be key, so related stocks in those sectors would also benefit.
Some of the best companies to invest in for space industry upside are almost certainly little more than ideas at the moment. Some are more developed, though, and could be IPO candidates. Some names, such as NASA-partnered SpaceX, are already spare industry pioneers.
Though currently hypothetical, publicly-traded SpaceX stock would be instantly popular. Indeed, its listing would likely kickstart the age of space industry investing proper. Until then, the Elon Musk link makes Tesla a tangentially-related play for space industry upside. Tesla is also a key player in the alternative power space, creating technologies that could come in handy off-world.
A long shot stock to buy for a trillion-dollar market
A TSX stock that could take off long-term would have to be a wide-moat mineral extraction name. Natural resources is one thing that Canada does best, so picking a mining stock for super long-term space industry upside checks out.
My choice here would be Lundin Mining (TSX:LUN). This company is diversified across metals and geographical locations. This tells me that Lundin Mining is experienced in a range of extraction techniques. In office-speak, this translates as “transferable skills.” Its balance sheet is healthy, so I would not need to worry about its presence in my portfolio too much.
Buying $5,000 worth of shares in Lundin Mining, assuming conservative 33% growth in five years, would generate around $1,666 by 2025. Lundin Mining would also give me access to copper, zinc, nickel, and gold.
All of these have strong real-world applications, even if this well-established business never sets its sights on the stars. However, the space industry capital growth prospects in 10 to 20 years could eclipse such rates of return.
Even if Lundin Mining declines to get involved directly in space industry, the metals it produces would rocket once this new field takes off, which makes it a solid catch-all. This name is also excellent value for money, selling at half its fair value.
Additionally, Lundin Mining pays a moderate 2.4% yield, which means that I would get regular passive income while I wait for the great space mining revolution to ignite.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool recommends MAXAR TECHNOLOGIES LTD.