What was to be an eight-day trip turned into a months-long ordeal.
The Boeing Starliner is the vessel that got Butch Wilmore and Suni Williams to the International Space Station (ISS). I’m sure it was hyped up by the company as the next big thing.
Now, the astronauts are stuck in space because the Starliner is malfunctioning. Experts give them a one in 270 chance of surviving reentry on that vessel, which is not the kind of odd I would want to take.
The only other option would be to ring up Elon Musk, but that would cause Boeing and their counterparts in the Federal Government a massive amount of embarrassment.
In the 1990s, there were over 50 “prime” contractors for the Department of Defense. Since then, they’ve consolidated into five giant companies: Lockheed, Raytheon, Boeing, General Dynamics, and Northrop.
These massive companies are old, slow, sclerotic, and are starting to represent a risk to the interests of the U.S. government.
Like, how we want to go to space… but Boeing makes a spaceship that’s a national embarrassment.
Luckily, competition is on the way. The nature of war has dramatically shifted due to developments in the Russo-Ukranian war, and that is causing the Defense Department to panic a bit and change how procurement operates.
On the space side, there’s a handful of public companies that show promise.
AST SpaceMobile (ASTS) is a company that is developing cellular networks in space. Their stock recently went parabolic, running from $2 to $35 in just a few months.
Rocket Lab (RKLB) is another one. Guess what they build?
The stock just broke out the new highs with some serious momentum behind it.
But there’s another one I like even better:
This stock is emerging from a downtrend after being left for dead this year.
If it moves the way the others have then it’s a quick double, and then we’ll see if they can start catching some heat to the upside.
Space plays are interesting because while they are very capital intensive on the frontend, if you can get the satellites in space and offer a solid service, then your margins start to increase and you are then spinning out cash flow.
That’s what happened to this company. Their gross margins were negative in 2021, and now they’re sitting at over 50%.
What’s more is there were two significant insider purchases – one nearly a million dollars and the other at $270k.
These two insiders stand to make a serious return on their cash, and that’s why I think they put money into the stock.
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