Investors seeking high growth sometimes have great options available at low prices. Maxar Technologies (TSX:MAXR)(NYSE:MAXR) is one of those rare stocks. But how should investors time their share purchases?
Due to report earnings November 2, investors are already nudging this name higher after a year-to-date characterized by high-profile partnerships. Friday saw the name up by a point-and-a-half.
While this may not look significant, small signs like this can suggest which way investors are leaning when an earnings report is due to be released.
So should investors buy Maxar before earnings? Ordinarily, investors getting into Maxar do so for its story, for its growth potential, and for its value for money. This is a stock trading at a 58% discount off its fair value, after all. Technically, then, this is a name to buy at any time.
A high-growth stock at a great price
Maxar has also seen huge growth this year. Back in 2019, Maxar was looking at 70% upside; however, in the last 12 months, Maxar has actually seen share price appreciation of almost 250%. This one space tech name therefore straddles two divergent investing strategies: Value and growth.
Two things stand out at the moment, though, and they have nothing to do with that earnings report that’s coming up: the high-stakes U.S. election, and 12-month total returns potential. The election could see Maxar tick higher if the Republicans hold onto the White House. This is because the Trump administration has been pro-NASA. And in turn NASA has been pro-Maxar. So Maxar could rally on a Trump win.
But let’s put the election to one side for the time being. As it stands, the projected one-year total returns for Maxar is 280%. This is largely going undetected, but it suggests that investors looking for near-term wealth creation could have a money-spinner on their hands.
The kicker, though, is that returns could be set to take a downward turn in subsequent years, potentially by 45% by mid-decade. Investors may therefore want to stand ready to trim in a year’s time.
However, the downturn may not be forthcoming, especially if the political climate in the U.S. remains conducive for growth. Maxar is also a high-momentum pick for 5G growth and the coming satellite communications boom. Tech investors should see also the potential for Tesla sister spinoff Starlink to IPO in the future.
To recap, investors have in Maxar a Tesla-adjacent stock trading at a deep discount that could rally in the next couple of weeks. Longer-term, Maxar is likely to keep on adding growth to a stock portfolio as the space industry evolves.
This week saw NASA’s historic OSIRIS-REx mission make contact with the Bennu asteroid. The mission, designed to retrieve a sample of the near-Earth object, fulfills a range of scientific objectives. From an economic standpoint, the mission also takes us a step closer to offworld mineral extraction.
A key partner on other NASA projects, Maxar is a buy for the potential upside in this rapidly progressing industry getting set to take off.
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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.