3 Traits Every Space Company Needs
Millions of Americans are locked out of high-speed internet because it’s too costly to lay down wire to their areas.
If you’re one of these folks, you know exactly what I mean.
You might not even top 3 Mbps on a good day.
Let me put that in context for you…
At that speed it would take over two hours to download a movie from Netflix.
But that’s all about to change.
With its Starlink, SpaceX, a space company that I’ve had my eye on for some time, recently kicked off a global internet beta test.
And the performance results have just come in.
They’re out of this world!
Using only satellites and personal ground devices, users have reported download speeds averaging around 50 Mbps and up to 100 Mbps.
But Starlink is just one of several technologies from companies racing to beam ultra-fast internet from space.
Today I’m going to reveal the three traits that each of these space companies shares…
1. Track Record of Winning Performance
This first point seems pretty straightforward.
When you first research a company, look and see what their history is.
What was their initial goal, what have they done since then and what gives them their identity?
Obviously, smaller startups are riskier, less vetted and more likely to fall apart than larger, well-established companies.
At the same time, they have a chance to get bought up by larger, more established companies, which usually results in great things for those invested in the smaller company.
Don’t stop there, though.
Look at what the current CEO has done since they’ve taken over. Ask yourself are they taking the company in the right direction? What’s their vision? Is it too grand or not big enough?
2. Consistent Cash Flow
Similar to looking at what the company has done, you want to see who they’ve partnered with.
Government contracts are often a good indicator of a trusted, reliable source of income for space companies.
NASA’s budget alone is $22 billion for the year, but there’s a slew of different intelligence and defense agencies that need private companies to support their mission.
This week, for instance, the United Launch Alliance is sending up a satellite for the National Reconnaissance Office. There are dozens of agencies and departments just like the NRO that need satellites to accomplish their goals.
If a company hasn’t secured contracts yet, then look at what kind of funding they are doing.
If it’s a satellite company, funding is usually done either by the CEO putting their own money into the company or through fundraising.
But note how much they are actually raising. If it’s in the millions, then they’ll want to up the efforts.
Space isn’t cheap. Launches even less so.
Oftentimes, a company will have other areas where they get revenue to fund things like satellite and space launches.
If they don’t, be very wary of investing.
3. Astronomical Assets
The biggest thing to look at with any space company is what is their product?
When you think about space, usually your mind goes straight to launching satellites or rockets.
Look at the actual rockets or satellites themselves.
For rockets, compare them with the rest of the industry. Look at the cost of launch (production and the launch cost itself, how much cargo they can carry and how quickly the rockets can be built.
All of this can be applied to satellites as well. Look at what each satellite does and see if what they are doing will be around in 10–15 years.
Remember, things like earth imagery are going to be around for a long time. Intelligence and defense agencies as well as science institutions use satellite imagery every day.
Broaden your horizons too. There are those that launch the rockets, but there are also those that make them, and others that provide communication services.
There are a lot of companies out there, with huge amounts of potential.
If you aren’t confident in finding stocks on your own, I encourage you to talk to your broker or financial adviser.
A lot of times, they can offer analysis and a second opinion on a company.
And they can guide you to investing in a style right for you.
To a bright future,