How to Invest in Space Stocks
Space stocks have become increasingly popular in recent years as Elon Musk, Jeff Bezos and Richard Branson all race to the stars.
The space industry is expected to grow to more than $1 trillion by 2040 highlighting the significance of this relatively new and untapped sector.
In this article, we go through how to invest in space stocks this year, the best space stocks to watch and how to invest with competitive commissions.
Table of Contents
Why Invest in Space Stocks?
According to research from investment bank Morgan Stanley, the global space industry could increase to more than $1 trillion by 2040. There is a lot of untapped growth potential in space which includes broadband by satellite and human space travel.
While space companies are mainly owned by private companies and a few public companies, governments have only started to take it seriously in the past few years. For example, in 2019 the US created a sixth brand of the military called Space Force.
It was only in 2020 when NASA launched a manned flight to the ISS (International Space Station) using a rocket that was developed commercially by the private sector. Investing in space stocks early on could be interesting for long-term investors willing to take on higher risk from new sectors which can be more volatile.
List of the Best Space Stocks
Before we look at some of the best space stocks to watch this year, it’s worthwhile remembering that investments go up and down. Exercising proper risk management is essential – especially when investing in new sectors such as space exploration.
When investing in any company or sector thorough research is important. What is best for one investor will be different for another so be sure to identify your own risk tolerance levels and the type of investing portfolio you want to build.
Below is a list of some of the best space stocks to watch this year for you to build your research and analysis upon. While you can’t buy Elon Musk’s SpaceX stock just yet, or Jeff Bezos' Blue Origin, there are some other interesting space stocks to focus on. Let’s dive in!
- Virgin Galactic (SPCE)
- Trimble (TRMB)
- Boeing (BA)
- Lockheed Martin (LMT)
- Northrop Grumman (NOC)
- Kratos Defence & Security Solutions (KTOS)
- Iridium Communications (IRDM)
The Top 3 Space Stock to Watch This Year
The list of space stocks highlighted above covers a wide range of companies that offer something different to the space sector. This list is not exhaustive and there will be more companies moving into the space sector providing a different type of service or solution in the future.
Let’s have a look at the top 3 space stocks to watch this year in more detail.
1. Virgin Galactic – Top Rated Space Stock Founded by Richard Branson
Virgin Galactic was founded by Richard Branson in 2004. The company went public in 2019 through a Special Purpose Acquisition Company (SPAC) merger. The company is considered to be the world’s first commercial spaceline company which plans to take tourists to space for a $250,000 90-minute flight.
The company are planning to fly people to sub-orbital space this year. The VMS Eve is a carrier plane that will drop six passengers and a two-pilot VSS space plane called Unity to an altitude of around 15,000 metres. Unity will then use its onboard rocket monitor to go to the final frontier before coming back home to Virgin Galactic’s launch site in New Mexico.
Four flights have already taken place with Richard Branson on the last one in June 2021. Since then, the spacecraft has been decommissioned for upgrades. While Virgin Galactic CEO Michal Colglazier has stated that commercial flights are on track for this year, the company is already flight testing the next space plane, VSS Imagine, this year.
Source: Admirals MetaTrader 5, SPCE, Monthly - Data range: from 1 Dec 2017 to 27 Feb 2022, performed on 27 Jan 2022 at 10:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
The long-term share price chart of Virgin Galactic (SPCE), shows the amount of volatility to expect in space stocks. After rallying to a record high of $62.75 from 2017 to 2021, the share price has collapsed to near record lows and is very close to being in a penny stock territory.
But, with commercial flights planning to begin this year and more spacecraft being tested for next year it could be an interesting price level for those comfortable with such a volatile share price.
2. Trimble (TRMB) - A Lesser-Known Space Stock That Helped to Land the Apollo Spacecraft
Trimble is a space and defence company that was founded in 1978. The company’s materials science expertise helped launch the Apollo shuttle program and land the Apollo spacecraft on the moon. While the company is not involved in commercial space flights, they provide solutions for space exploration which includes launch vehicles, crew capsules and more.
In 2021, the stock was added to the ARK Space ETF (exchange traded fund). The ARK Space Exploration and Innovation ETF (ARKX) was designed by famous investor Cathie Woods. The aim of the fund is to invest in equities that are engaged in the theme of space exploration and innovation.
Trimble is currently the largest holding in the ETF which is a sign of the company’s potential as a space stocks leader.
Source: Admirals MetaTrader 5, TRMB, Monthly - Data range: from 1 May 2005 to 27 Feb 2022, performed on 27 Jan 2022 at 10:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
The monthly price chart of Trimble’s share price shown above highlights a long-term uptrend. While there have been some significant dips in its price during 2007, 2014 and 2020 the share price has – historically – recovered.
Trimble did not escape the global stock market sell-off at the beginning of 2022. The share price has fallen since reaching a record high of $96.43 in August 2021. From a technical analysis perspective, the share price is falling back towards a range of moving averages where price has historically turned before.
For example, the price has rallied higher on each historical instance it touched the 100-period exponential moving average (green line). While the current price is still far away from this level it does highlight potential areas for investors to keep an eye on.
3. Boeing (BA) - A Prime Space Stock Contractor to NASA
Boeing is most famous for its commercial aeroplanes, such as the Boeing 777, used by commercial airlines and its defence products for the military. However, Boeing has been involved in space exploration since 1969 when it built the Saturn V rocket which launched Apollo 11 to the moon.
The company is considered to be a prime contractor to NASA and has helped on multiple projects in the past. For example, Boeing’s Starliner spacecraft is used to carry NASA astronauts to and from the International Space Station (ISS).
Source: Admirals MetaTrader 5, BA, Monthly - Data range: from 1 Apr 2007 to 27 Feb 2022, performed on 27 Jan 2022 at 10:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
Boeing is not your typical direct space stock as its revenue comes from a multitude of sectors. The company’s share price has struggled since 2018 with several damaging failures in its Boeing 737 Max aircraft and then the pandemic which put a stop in the aerospace industry.
However, as space exploration grows and as the world looks towards life after the pandemic, it could be an interesting blue-chip stock to keep an eye on.
How to Invest in Space Stocks
To start investing in space stocks you first need a live trading account. Alternatively, you can also practice on a demo trading account until you are ready to go live.
You can open either type of account in Admirals in just a few minutes which will give you access to the world’s most popular stock trading platform MetaTrader 5 for desktop, web and mobile.
Below is a step by step process on how to start investing from the MetaTrader 5 web platform.
- Login to your Admirals account to gain access to the Dashboard. This area allows you to manage your different accounts, access deposit and withdrawal options and premium analytic features.
- From the Dashboard, click on the Trade icon next to your account name to open the MetaTrader 5 web-based trading platform.
- To view a live price chart and trading ticket, type in the name of the instrument at the bottom of the MarketWatch window. Then drag the instrument name onto the chart where you can then access technical trading indicators and view different timeframes.
- To open the trading ticket, right-click on the chart, select Trading and then New Order. You can now enter your entry, stop loss and take profit levels and contract size for risk management.
Source: Admirals MetaTrader 5, 27 February 2022
Why Invest in Space Stocks with Admirals?
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