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| By Michael A. Robinson |
To say I had a front row seat at the dawn of the original Space Race is no exaggeration.
See, as a six-year-old I had a direct experience. My dad was a Marine Corps officer in North Carolina in the early 1960s.
He was assigned to escort a noted astronaut around our local community. That astronaut was none other than John Glenn, the first American to orbit earth.
During that base tour, Glenn stopped at our grade school, and I got to shake his hand. This was way before selfies, so I didn’t get a photo.
But I did get a shot of adrenaline from meeting this famous national hero. To say I was then hooked on space adventures is an understatement.
That recently came full circle when I was visiting my mom in Melbourne, FL. On a gorgeous Sunday morning, I walked outside her front door and saw a SpaceX rocket in flight.
For me, it really cemented how far we have come and how exciting — and profitable — the New Space Race has become.
In a moment I will reveal a great way to play this unstoppable trend that McKinsey says is on its way to being worth $1.8 trillion …
First, however, there’s a fascinating new technology that could take space launches even more widespread than SpaceX’s reusable rockets.
It’s taken on greater meaning following news just weeks ago that China became the first nation to bring back rock samples from the far side of the moon.
Both China and the U.S. want to build lunar bases. And for us to compete with China’s aggressive plans, we will need a far more robust launch infrastructure.
Blasting Off from Sea
As the New Space Race heats up, it only makes sense that launches have increased as well.
Part of this has to do with the paradigm-shifting reusable stages of big payload rockets introduced by SpaceX. Being able to reuse the primary stages saves not only costs, but time before new flights can occur.
Last year, of the 108 commercial space launches, 98 were performed by SpaceX. And there were 2,664 overall launches that included lots of satellites last year, a new record.
This has spawned a booming demand for launch sites — and rockets.
Land-based launch pads are booked for years, and finding land to build new launch facilities is difficult … and expensive.
That’s why many space companies are turning to mobile and fixed sea-fired platforms.
The latter were first imagined in 1999 by Sea Launch. But they are becoming pragmatic solutions to today’s capacity challenges.
You can park them near the equator, where it takes less energy to get to space. That allows for smaller rockets to carry more payloads.
You see, it’s not just rockets to the moon and Mars that are happening. It’s other industries that are part of space today. New laser communications are revolutionizing global connectivity from space.
New tech is also allowing for smaller satellites, which are lighter and cheaper to launch on smaller rockets.
There’s even a growing sector of companies building “trash trucks” to get rid of old and broken satellites to free up room in key orbits.
In essence, we’re at the ground floor of a space elevator, and the winners are starting to reveal themselves.
A Backend Play
That brings me to a storied leader that has been around since 1957, the year the Soviets launched Sputnik and set off the original space race.
It has quietly become a major player in the aerospace industry.
HEICO (HEI) started as a precision engineered parts supplier to the commercial and military airplane industry. And over the years it has continued to buy niche parts makers to add to its influence in a variety of high-value markets, where reliability and durability are at a premium.
Its aerospace work has really taken off in recent years as aircraft, satellites and space technologies have taken significant steps forward in sophistication.
HEICO is a leading supplier to most of the major — and minor — space companies in the marketplace today.
Think of it as a mutual fund for the space industry. It represents the entire aerospace sector in just one stock.
For example, NASA’s Perseverance rover landed on Mars in 2021 and is still operational today. HEICO had four subsidiary companies that were part of the platform.
But the companies under its name have other strategic value beyond the planets and stars. HEICO is sought after for its electro-optics (laser) components as well.
Lasers are a key component in drones, self-driving vehicles and even next-gen weapons systems, to name a few.
Yet the biggest potential is in laser communications, which can allow communications (data and voice) to move at light speed.
That’s huge when you’re covering long distances and managing data from space — no dead spots.
Also, since manned space missions are now more about colonization than simply planting a flag, more space-ready equipment is already growing in demand.
A Great ‘Twofer’
HEICO is a significant player much closer to Earth, too. It has a long history of supplying precision parts for the commercial and military aircraft sectors as well.
And as I’ve said here before, commercial airline demand is expected to boom for decades to come, and demand for new aircrafts is outstripping supply.
What’s more, militaries around the world are buying drones for air, land and sea. The “networked battlefield” where images and information are relayed across the world in real time, all rely on HEICO subsidiaries as well.
So, let’s talk numbers. HEICO is expected to close the year with earnings growth of 24%.
At that rate, earnings would roughly double in three years. HEICO also recently reported record net sales and operating income.
This is a stock that gives us a front row seat to the New Space Race. I’d keep it in my sights if I were you.
Best,
Michael A. Robinson
P.S. If you fear you missed out on the Nvidia rocket ship after this week’s choppy market, fear not. The company is making a $1 trillion pivot. No, the best way to play it isn’t in NVDA directly … but with these “Silent Partners.”
