The space sector has been busy with headlines and gains. SpaceX is up about 30% this month, and Rocket Lab (RKLB) is up about 25%. The UFO ETF (Procure Space ETF), which holds a basket of space names, rose about 58% over the past year.
There has been more volatility since the SpaceX IPO. Many investors are pausing to decide which single stocks to hold, or whether to just buy the whole group through a fund like UFO.
Losses now, growth later
Earnings at many of these companies show losses, but the losses come from heavy spending. They spend to set themselves up for where the industry is heading. Rocket Lab (RKLB) is working to launch its next-generation Neutron rocket, which will carry larger payloads and serve clients with bigger needs. Rocket Lab is also doing mergers and acquisitions, including a pending Iridium deal that would give it a launch client it owns.
SpaceX belongs in any space conversation now. These firms are putting large sums into very ambitious projects, and some of those projects could turn into big payoffs.
Backlogs, once a worry, now signal strong demand - so many orders that companies keep working to fill them all. The positive drivers are new government contracts, commercial contracts, M&A activity, and fresh money being spent. That mix is why investors should not fear these companies; they keep growing.
Satellite-to-cell is the name to watch
One company drawing more attention over the past two years is ASTS (AST SpaceMobile). Interest jumped after SpaceX shared Starlink mobile details during its earnings report. ASTS helps other mobile carriers with satellite-to-cell communication - sending phone signals through satellites. Satellite providers now offer this, and cell providers want it for their customers.
ASTS (AST SpaceMobile) has signed several deals with carriers including AT&T (T) and Verizon (VZ). ASTS is up 22% this month, with talk of new revenue targets as it expands its satellites. The open question: will SpaceX take business from AT&T (T), Verizon (VZ), Vodafone (VOD), and others, or just become one more option? If Starlink Mobile becomes a major rival to existing carriers, it could move markets. Time will tell how these shake out.
Space is hidden inside familiar products
Some firms are obvious space plays. Others are fully powered by space technology without people noticing. Garmin (GRMN) is one - people do not link it to space, but GPS makes it work. Maritime navigation and similar features depend on space; take space out and the device stops doing what it was bought for.
Other names in this area include Globalstar (GSAT), Firefly, and Sirius XM (SIRI).
The next frontier: replacing the ISS
Coming attractions include orbiting space stations to replace the International Space Station when it is decommissioned. Voyager (VOYG), further down the UFO holdings list, is building its own answer with Starlab.
