In this piece, we will take a look at the 11 best space stocks to invest in according to hedge funds. For more space stocks, head on over to 5 Best Space Stocks To Invest In.
These days, one of the hottest industries is astronautics. This particular industry has been capturing public attention for years now, with the last space mania taking place in the late 1900s when the National Aeronautics and Space Administration (NASA) became the first space (and only) space agency in human history to land humans on the Moon. NASA’s massive success, which took place through the Apollo program, ignited government interest in space exploration and research – the result of which was the International Space Station (ISS).
The ISS is a space laboratory that orbits the Earth more than fifteen times a day at a speed of 27,600 kilometers per hour and an altitude of 412 kilometers. It was built through a collaboration between the U.S. and Russia, with later modules being provided by Japan and the European Space Agency (ESA). The ISS has played a major role in reigniting public interest in space exploration, especially at the turn of this century, particularly in the U.S. This is due to the fact that the station was built by missions conducted by the Space Shuttle – the first true space plane that took off from Earth on a rocket but landed back on the ground by using its wings.
However, in the background, the ISS has silently made major contributions to science and technology as well. Space exploration is often heavily criticized due to the massive costs of developing both rockets and other equipment. The space station does cost a massive $3.1 billion to maintain annually, and it’s estimated that so far, NASA has spent $100 billion on the space laboratory. At the same, there are a wide variety of technology spinoffs from both the station itself and from other NASA research. Since astronauts live and work on the station for months at a time, they need advanced life support systems to survive. These have led to the development of complex water filtration layers, which are used to purify even the sweat that comes off the crew’s body as they exercise in space.
These life support systems also include research on indoor farming, as while astronauts do not grow all of their food in orbit, they are still researching indoor food technologies which have led to several startups using NASA technology to make similar products and systems on Earth. Astronauts on the space station also have to perform spacewalks to repair, maintain, and upgrade the station and the technology used in their helmets has also been used to develop scratch resistant sunglasses and welder glasses. Finally, another crucial NASA spinoff technology is the space blanket, which is crucial in first aid applications to prevent hypothermia and shock and was initially developed as a shielding blanket for the space station.
After the Space Shuttle retired, the crew was launched to the ISS through Russia’s Soyuz rockets, which led to little fanfare in America. However, the station would prove critical in the rise of today’s darling of the astronautics industry, Space Exploration Technologies Corporation (SpaceX). SpaceX is the only company in the world that is capable of vertically landing its rockets and reusing them. This is through its Falcon 9 rocket, a launch vehicle that had been designed specifically to meet the requirements of the Dragon spacecraft. And the Dragon is part of NASA’s Commercial Crew Program (CCP) and the Commercial Resupply Services (CRS) programs that have outsourced the delivery of both crew and cargo to the ISS.
However, the space industry itself isn’t all about NASA and SpaceX. The private sector is slowly growing and so far, the biggest private sector portion of astronautics is satellites. Humans have been using satellites for a variety of tasks such as imagery, communications, and the internet for decades now, and as companies like SpaceX dramatically reduce the cost of space access, this industry is also growing. In fact, SpaceX itself operates the world’s largest satellite constellation, Starlink, which is made of thousands of small satellites orbiting the Earth to provide global internet connectivity.
These days though, the buzz in the industry is all about big rockets. And by big, we mean huge. Late last year, NASA successfully launched the Space Launch System (SLS). The SLS stands at more than three hundred feet tall, and after last year’s successful liftoff, is currently the most powerful operational rocket on Earth since it is capable of generating a massive 8.8 million pounds of thrust. On top of the rocket is NASA’s Orion spacecraft, part of which is manufactured by Lockheed Martin Corporation (NYSE:LMT).
However, even as NASA is racing towards making the next Artemis rocket as it recently joined all of the vehicle’s major components together and unboxed the engines, it is facing the heat from SpaceX. SpaceX was after all formed not to send a crew to the space station, but to Mars. And to achieve this, the company is building the world’s largest rocket called Starship in Boca Chica, Texas. The Starship is designed to stand at a massive 390 feet tall and churn out an absolute eye popping 17.1 million pounds of thrust in order to meet the power and capacity requirements for Martian missions. And a highly anticipated orbital test flight for the rocket might be around the corner as well, with some estimates suggesting that can take place as soon as next month.
Yet, while SpaceX aims for Mars and NASA looks at the Moon, the world’s largest aeronautics firm The Boeing Company (NYSE:BA) is racing to launch its crewed vehicle to the space station. And for Northrop Grumman Corporation (NYSE:NOC), whose solid rocket boosters power the SLS and the firm responsible for manufacturing the James Webb Telescope, business is booming as highlighted by management in a recent earnings call:
In 2022, the James Webb Space Telescope proved its status as the world’s most powerful space telescope and an engineering marvel. It achieved full operational status, shared first images in July and continues to discover and inspire with its incredible insights into distinct galaxies. This project is just one example of the technology innovation and leadership our team brings to our customers. And it has provided an excellent platform for attracting talent to our industry and our company. In 2022, we continued to win new competitive awards across the company, achieving a book-to-bill ratio of 1.07. Two notable new awards are the space development agencies tracking and transport layers. As our customers look to expand their resilient national security space capabilities, these programs leverage our advanced space solutions for low earth orbit and showcase our ability to compete and win programs across a range of missions.
We also completed over 40 successful launch and space missions in the year, exemplifying our end-to-end capabilities in the space market and our ability to perform at scale. Further, our solid rocket boosters helped propel NASA’s base launch system as part of the Artemis 1 mission with the largest human-rated solid rocket boosters ever built. We also received a $2 billion award for GEM 63 solid rocket boosters in support of Amazon’s Project Kuiper. Together, SLS and Kuiper validate the robust investments that we’ve made in solid rocket motor capabilities. We also delivered advanced architectures that integrate sensors to provide unprecedented situational awareness for our customers. One example is our IBCS solution. After successful testing in the fourth quarter, IBCS is poised to transition from LRIP to full-rate production in 2023.
With these details in mind, let’s take a look at some top space stocks, with the notable picks being Lockheed Martin Corporation (NYSE:LMT), Northrop Grumman Corporation (NYSE:NOC), and The Boeing Company (NYSE:BA).
Pixabay/Public Domain
Our Methodology
We have focused on pure play space companies for the most part of this piece, however, companies that are essential to the sector but have other business divisions too are also mentioned. They are ranked through hedge fund sentiment courtesy of Insider Monkey’s 943 hedge fund survey for last year’s fourth quarter. For more on space, you can check out 12 Most Advanced Countries in Space Technology.
11 Best Space Stocks To Invest In According To Hedge Funds
11. Viasat, Inc. (NASDAQ:VSAT)
Number of Hedge Fund Investors in Q4 2022: 13
Viasat, Inc. (NASDAQ:VSAT) runs a satellite telecommunications network made of spacecraft in different orbits working with ground stations. It is based in Carlsbad, California.
13 of the 943 hedge funds surveyed by Insider Monkey had bought Viasat, Inc. (NASDAQ:VSAT)’s share in Q4 2022. The firm’s largest investor is Seth Klarman’s Baupost Group which owns 16.2 million shares worth $515 million.
Along with Northrop Grumman Corporation (NYSE:NOC), Lockheed Martin Corporation (NYSE:LMT), and The Boeing Company (NYSE:BA), Viasat, Inc. (NASDAQ:VSAT) is a hot space stock that hedge funds are piling into.
10. Terran Orbital Corporation (NYSE:LLAP)
Number of Hedge Fund Investors in Q4 2022: 14
Terran Orbital Corporation (NYSE:LLAP) is a satellite company that makes and operates its own spacecraft and provides similar services to others.
As of December 2022, 14 of the 943 hedge funds surveyed by Insider Monkey had bought a stake in the firm.
9. Planet Labs PBC (NYSE:PL)
Number of Hedge Fund Investors in Q4 2022: 17
Planet Labs PBC (NYSE:PL) is an earth imaging satellite operator whose spacecraft serve several industries such as insurance and finance.
Insider Monkey took a look at 943 hedge fund portfolios for last year’s fourth quarter and found out that 17 had invested in Planet Labs PBC (NYSE:PL).
8. EchoStar Corporation (NASDAQ:SATS)
Number of Hedge Fund Investors in Q4 2022: 23
EchoStar Corporation (NASDAQ:SATS) is an American firm that operates its own satellite network and provides similar capacity to other entities.
23 of the 943 hedge funds surveyed by Insider Monkey had bought the firm’s shares in Q4 2022. Out of these, Jim Simons’ Renaissance Technologies is EchoStar Corporation (NASDAQ:SATS)’s largest shareholder with a $29 million stake.
7. Iridium Communications Inc. (NASDAQ:IRDM)
Number of Hedge Fund Investors in Q4 2022: 30
Iridium Communications Inc. (NASDAQ:IRDM) is another satellite telecommunications provider. The firm is based in Mclean, Virginia.
By the end of December 2022, 30 of the 943 hedge funds surveyed by Insider Monkey had bought Iridium Communications Inc. (NASDAQ:IRDM)’s shares. Kevin Kuebler and Ming Lam’s Silver Heights Capital Management is the firm’s largest investor through a $125 million stake. had
6. DISH Network Corporation (NASDAQ:DISH)
Number of Hedge Fund Investors in Q4 2022: 37
DISH Network Corporation (NASDAQ:DISH) is a telecommunications company that uses satellites to provide entertainment and communications products.
Insider Monkey’s fourth quarter of 2022 survey of 943 hedge funds found that 27 had invested in the firm. DISH Network Corporation (NASDAQ:DISH)’s largest shareholder is Boykin Curry’s Eagle Capital Management which owns a $215 million stake.
Lockheed Martin Corporation (NYSE:LMT), Northrop Grumman Corporation (NYSE:NOC), and The Boeing Company (NYSE:BA) are met by DISH Network Corporation (NASDAQ:DISH) as a top space stock.
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Disclosure: None. 11 Best Space Stocks To Invest In According To Hedge Funds is originally published on Insider Monkey.