In this article, we discuss the 5 best space stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to 10 Best Space Stocks to Buy Now.
5. Iridium Communications Inc. (NASDAQ: IRDM)
Number of Hedge Fund Holders: 18
Iridium Communications Inc. (NASDAQ: IRDM) is ranked fifth on our list of 10 best space stocks to buy now. The company operates from Virginia and provides mobile and data communication services to businesses and consumers.
On August 3, investment advisory Morgan Stanley initiated coverage of Iridium Communications Inc. (NASDAQ: IRDM) stock with an Overweight rating and a price target of $50, noting the firm could double service revenue growth by 2023.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm ARK Investment Management is a leading shareholder in Iridium Communications Inc. (NASDAQ: IRDM) with 13.5 million shares worth more than $543 million.
In its Q4 2020 investor letter, Baron Growth Fund, an asset management firm, highlighted a few stocks and Iridium Communications Inc. (NASDAQ: IRDM) was one of them. Here is what the fund said:
“Iridium Communications Inc., a leading satellite communications provider, rose after results demonstrated resiliency despite exposure to pandemic impacted verticals. Iridium is uniquely able to offer commercial customers true global voice and data coverage. Iridium’s Certus products have a growing pipeline with Maritime and Department of Defense customers, which should add to growth as installations accelerate. The company also saw strong growth in consumer-facing channels, which are benefiting from attractive secular trends.”
4. Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD)
Number of Hedge Fund Holders: 29
Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD) is a California-based company that makes and sells aerospace and defense products. It is placed fourth on our list of 10 best space stocks to buy now.
In earnings results for the second quarter, posted on July 26, Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD) reported earnings per share of $0.59, beating market predictions by $0.15. The revenue over the period was $556 million, beating estimates by $21 million.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Steel Partners is a leading shareholder in Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD) with 3.9 million shares worth more than $190 million.
3. Northrop Grumman Corporation (NYSE: NOC)
Number of Hedge Fund Holders: 42
Northrop Grumman Corporation (NYSE: NOC) is a Virginia-based aerospace and defense firm. It is ranked third on our list of 10 best space stocks to buy now.
On June 4, investment advisory Stifel upgraded Northrop Grumman Corporation (NYSE: NOC) stock to Buy from Hold and raised the price target to $475 from $350, identifying the company as a quality defense business.
At the end of the second quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Northrop Grumman Corporation (NYSE: NOC), up from 40 in the preceding quarter worth $1.5 billion.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Northrop Grumman Corporation (NYSE: NOC) was one of them. Here is what the fund said:
“New purchases include Northrop Grumman. Northrop Grumman is a leader in manned aircraft, unmanned aircraft, spacecraft and missile-defense systems. We initiated a position in November 2020, as we believe the name is trading at an undeserved discount, despite having the potential to accelerate revenue over the next 24 months. In 2020, Northrup signed a contract to work with the US Air Force on their Ground Based Strategic Deterrent (GBSD) and B21 bomber. We believe the company’s portfolio is well-positioned with a highly desirable space segment business, significant classified content and GBSD driving growth. While the market has been focused on a “blue wave” risk to the defense budget, the industry is typically driven by threat assessment rather than budget constraints. If budget cuts were ever to affect the US Army, that customer represents less than 10% of the company’s revenue. This reinforces our belief that Northrop is well-positioned for the future and trades at an attractive valuation.”
2. Lockheed Martin Corporation (NYSE: LMT)
Number of hedge fund holders: 58
Lockheed Martin Corporation (NYSE: LMT) is placed second on our list of 10 best space stocks to buy now. The firm operates as a security and aerospace company and is headquartered in Maryland.
On May 12, investment advisory Wells Fargo initiated coverage of Lockheed Martin Corporation (NYSE: LMT) stock with an Equal Weight rating and a price target of $384. Matthew Akers, an analyst at the firm, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm Arrowstreet Capital is a leading shareholder in Lockheed Martin Corporation (NYSE: LMT) with 536,001 shares worth more than $202 million.
In its Q4 2020 investor letter, RiverPark Advisors, LLC, an asset management firm, highlighted a few stocks and Lockheed Martin Corporation (NYSE: LMT) was one of them. Here is what the fund said:
“Despite better-than-expected third quarter results, LMT shares were weak for the quarter as defense spending is expected to be flat for the coming year. With a record $150 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year in 4-5 years (3Q’s revenue upside was from the F-35), we believe LMT should grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions (LMT acquired AJRD for $4 billion in late December), debt pay down, a 3% dividend yield, and continued share buybacks from $6 billion per year of free cash flow should lead to even greater shareholder returns.”
1. The Boeing Company (NYSE: BA)
Number of Hedge Fund Holders: 59
The Boeing Company (NYSE: BA) is ranked first on our list of 10 best space stocks to buy now. The company makes and sells military aircraft, satellites, human space flight and launch systems, and related services. It is headquartered in Illinois.
On August 19, investment advisory Cowen maintained an Outperform rating on The Boeing Company (NYSE: BA) stock with a price target of $290, noting the shares were attractively priced keeping in mind the expected cash flow yield for the firm in 2022.
At the end of the second quarter of 2021, 59 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in The Boeing Company (NYSE: BA), the same as in the preceding quarter worth $1.4 billion.
In its Q1 2020 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and The Boeing Company (NYSE: BA) was one of them. Here is what the fund said:
“We’ve known Boeing for a long time. It’s always been a high quality company that’s traded for a premium valuation owing to its position as a global duopoly. We’d looked at it recently after weakness due to its highly publicized Max 737 issues, but it never got cheap enough for us to pull the trigger. After the pandemic, the stock went into freefall as its customer bases’ business dried up and people worried about its liquidity. The stock fell from $338 on February 19th when the S&P hit its high to a low of $89. We bought the stock after the new CEO Dave Calhoun said publicly that it would not take government capital if it required equity dilution because it had many other options. Our average price is just above $120 where it was trading for less than 7x what it earned in 2018. It will likely take a while to normalize to those earnings levels, but this business will survive and ultimately we will own a leader in a global duopoly. Even on depressed forecasts, the company currently has about a 10-15% free cash flow yield. If and when the economy normalizes, we think Boeing could be worth more than double its current price.”
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