Space Sciences & Exploration
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Additionally, be sure and check out our new Science & Technology Investor section of each issue of The Penn Wealth Report!
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LMT $468
BA $173 NOC $502 AJRD $50 16 Nov 2022 |
Furthering US dominance in spaceflight, NASA launches Artemis to the moon
Fifty years almost to the month after Gene Cernan and Harrison Schmitt became the last humans to walk on the moon, NASA is ready to send a new generation of Americans to the lunar surface. At 1:47 a.m. EST the largest and most powerful rocket ever launched lifted off from the Kennedy Space Center, sending the Lockheed Martin-built (LMT $468) Orion crew capsule on its 25-day journey around the moon and back. The Space Launch System (SLS)—part of the Artemis Moon program—has been a massive effort involving a number of aerospace companies, to include Lockheed, Boeing (BA $173), Northrop Grumman (NOC $502), Aerojet Rocketdyne (AJRD $50), and Airbus (EADSY $30). Orion should reach the moon within six days, passing within sixty miles of the lunar surface before settling into its deep retrograde orbit—a looping route that extends 40,000 miles beyond the moon. That will set a record for the furthest distance from the Earth for any crew-capable ship in the history of human spaceflight. After spending two weeks in orbit, the craft will return home on 11 December with a Pacific Ocean splashdown. Much like the one-person Mercury, two-person Gemini, and three-person Apollo craft, NASA is taking a step-by-step approach with this program. Artemis 1 will show that the craft can safely ferry astronauts back to the moon; Artemis 2 will carry a crew of astronauts to lunar orbit; Artemis 3 will place Americans back on the moon’s surface. It should be noted that Artemis, in Greek mythology, is the twin sister of Apollo. While remaining on schedule with any crewed space program is always extremely challenging, NASA’s plans call for a landing to take place on the lunar surface as soon as 2025. The Apollo missions completed one of the greatest achievements in human history; in some ways, however, the Artemis program is even more important. Like our ancestral explorers, the earliest journeys always pave the way for trips designed to settle new lands. Between the six-person Orion capsule and Elon Musk’s Starship, which can be configured to carry a crew of up to 100, it is fair to say that we are entering the most exciting phase of our nascent journey into space. NASA has, in fact, already tapped SpaceX and its Starship for the second lunar landing program. We own all of the companies listed in this story other than Boeing. Despite SpaceX being privately held, we own that company via a private equity fund within the Penn Dynamic Growth Strategy. |
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SPCE $54
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Virgin Galactic gets OK from FAA to fly passengers into space
(25 Jun 2021) Virgin Galactic (SPCE $54) shares were soaring 34% higher on Friday following news that the FAA granted approval for the company to begin sending people into space aboard its spacecraft. The full commercial space-launch license opens the door for space tourism, the firm's only immediate source of revenues. It is interesting to note that Blue Origin, which is owned by Jeff Bezos, has yet to receive this FAA stamp of approval, despite Bezos recently announcing that he would be a part of the company's first manned flight scheduled for July. When pressed about the Blue Origin certification, an FAA spokesperson said that the agency would "make a decision when and if all regulatory requirements are met." As for Virgin, the company said it has already sold over 600 tickets for rides aboard its SpaceShipTwo spaceplanes, with each one going for around $250,000. The company said it will have five of the craft launching from its Spaceport America launch site in New Mexico. Ultimately, the plans call for launches taking place from multiple sites around the country, with destinations ranging from major cities around the world, to space-based hotels in orbit. Regarding the FAA certification, it is interesting to note that the agency has no authority over spacecraft operating above the atmosphere, but they do control the safety of the airways traversed by the spacecraft between launch and orbit. At $54 per share, SPCE seems pretty outrageously priced to us—even though we are excited about the company's strategic plans. It is normal for a nascent growth company to have no P/E ratio, as they often have no earnings. What is unique about Virgin Galactic is its $13 billion market cap on a foundation of virtually zero revenues (other than the 250-large they collected for each ticket sold for the promise of a future flight). |
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SpaceX
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NASA awards SpaceX contract to build the spacecraft which will take astronauts back to the moon
(16 Apr 2021) It was initially whittled down to three companies—Musk's SpaceX, Bezos' Blue Origin, and Dynetics—but we had our hunch as to who would walk away with the prize; the prize being a coveted NASA contract to develop the craft which will take astronauts back to the moon. Blue Origin tried to stack the deck in their favor by teaming up with the likes of Lockheed Martin (LMT) and Northrop Grumman (NOC) and by calling their group a "national team." In the end, however, SpaceX was awarded the $2.9 billion contract. And why not? While other companies have fiddled or floundered, SpaceX has been busy sending astronauts and cargo to the International Space Station (ISS). Real feats, funded with real revenue. Most importantly, in the extreme-risk arena of human spaceflight, SpaceX has won the trust of America's space agency. The United States launched the Artemis program back in 2017 with the express goal of landing men and women on the moon by 2024, fifty-two years after Gene Cernan and Harrison Schmitt crawled back into their lunar module and gently lifted off from the moon's surface as part of their Apollo 17 mission. Who could have imagined back in 1972 that it would take us so long to return. While the 2024 target might have to be pushed out, by nominating former astronaut and US Senator Bill Nelson to head up the space agency, President Biden has signaled his support for a strong US manned space program; quite a different story from his Democratic predecessor, Barrack Obama. SpaceX's Crew Dragon Endeavour spacecraft is slated to launch on its next mission to the ISS this coming Thursday. On board will be mission commander Shane Kimbrough, pilot Megan McArthur, Japanese astronaut Akihiko Hoshide, and European Space Agency mission specialist Thomas Pesquet. |
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ARKX
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Cathie Wood's ARK Space Exploration & Innovation ETF makes its debut
(31 Mar 2021) To say that Cathie Wood, founder, CEO, and CIO of ARK Investment Management, has made a big splash in the investment world is an understatement. Her skills at uncovering and investing in primarily small- and mid-cap tech and innovation companies (and increased marketing, of course) have led to a stunning inflow of funds during a horrendously tough year—her firm's assets under management (AUM) went from around $2.6 billion to over $50 billion. This week, Wood launched her latest gem: the ARK Space Exploration and Innovation ETF (ARKX $20). The fund, according to ARK, will invest in companies operating under one of four areas: orbital aerospace, suborbital aerospace, enabling technologies, and aerospace beneficiaries (e.g. Internet access). The top holding (of around 50) is scientific and technical instruments maker Trimble (TRMB $78); others in the top-ten list include Kratos Defense & Security (KTOS), L3 Harris Technologies (LHX), and Iridium Communications (IRDM). It would be safe to assume that SpaceX will be among the holdings when that company ultimately goes public. I must admit to being excited about this fund, and appreciate the company's complete transparency with respect to buys and sells—what a refreshing concept. Based on the explosive growth in all things tech and space related as of late, is this fund overvalued out of the gate? I don't believe so. Looking through the holdings, many are industrial or tech names which are not on most investors' radar screens. It is an impressive lineup. |
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SPCE
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Virgin Galactic lands a deal with NASA for astronaut training program
(23 Jun 2020) Considering Richard Branson's Virgin Galactic (SPCE $7-$17-$42) spacecraft, SpaceShipTwo, doesn't even leave the upper atmosphere (it goes roughly 100km, or 62m up), we were surprised to see the company awarded a contract from NASA. Nonetheless, under the latest Space Act Agreement, the US space agency will pay Virgin to develop a private orbital astronaut readiness program. The idea is to train non-NASA astronauts for eventual trips to the International Space Station, though they will have to hitch a ride to the ISS on an actual space launch vehicle. Investors liked the news, driving SPCE shares up 15% on Monday. In addition to its new astronaut training program, Virgin Galactic is ramping up its space tourism business, which will take passengers to the edge of space, and is also developing plans for a hypersonic point-to-point travel business. We are impressed by the way NASA is fostering America's new civilian space program, but we wouldn't rush to buy SPCE shares, as the company is a long way from profitability. |
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SpaceX
Crew Dragon |
America ushers in an exciting new era of spaceflight
(05 Jun 2020) As a lifelong space buff, I have always equated/compared human spaceflight to the discovery, exploration, and ultimate colonization of the New World. That effort moved at a snail's pace until private enterprise got involved. This past week, in a truly historic moment for mankind's future in space, humans took off for the first time ever on a private launch vehicle—with some help from NASA, of course. Equally important, America regained the power it willingly abdicated a decade ago to launch astronauts from American soil. Bob Behnken and Doug Hurley, former members of the US Air Force and United States Marine Corps, respectively, blasted off in their Crew Dragon capsule nestled atop a SpaceX Falcon 9 rocket in a spectacular launch. Even more thrilling to watch than a Space Shuttle mission, the launch more closely resembled a Saturn V launch from the Apollo glory days. As for the astronauts, they docked with the International Space Station about 19 hours after launch. The Crew Dragon is an enormous asset to have docked at the ISS, as it gives the astronauts on board a "life raft," so to speak, should they need to exit the orbiting research platform. As for when Behnken and Hurley will return to earth, that depends on when the next commercial crew launch will be ready for takeoff. Even that is an incredible statement. Imagine having the Apollo 11 astronauts remain on the moon until Apollo 12 was ready to go! We have truly ushered in a new era of human spaceflight. Thank you, Elon Musk. |
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Virgin Galactic's meteoric rise says more about investors' thirst for exciting options than it does about Branson's company. (18 Feb 2020) It is exciting, it is cutting edge, it is science fiction come to life, and it is...ridiculously overpriced. Sir Richard Branson's space tourism company, Virgin Galactic (SPCE $7-$30-$29) didn't shoot out of the gate; it kind of limped out of the gate. After going public last year, its stock price floated around $10 per share before abruptly falling to $7.25 last November—just three months ago. All of that changed around 05 Dec, when the company began its crazy ride from $7.25 to $29.70 this week. So, what changed? Actually, really not much at all. Yet another piece of evidence that efficient market theory is bunk, the only real catalyst for the rise was Morgan Stanley initiating coverage on the firm with a Buy rating and a $22/share price target. The analyst compared the company's risk/reward profile to a biotech firm, but that is pretty flimsy. After all, a biotech can hit it big with a blockbuster and be in the black virtually overnight. Virgin Galactic only has so much capacity in its six-person Unity spacecraft. Even at $250k per flight, it would need a fleet of spacecraft launching daily to justify the stock price. More than a statement about the firm, investors are merely showing their desire for stocks in this exciting industry. We are waiting for Elon Musk's SpaceX to go public, but don't see that happening anytime soon. Space travel is going to be a multi-trillion dollar industry in due time. In the meantime, we suggest investors look for small- and mid-cap support companies which supply the high-flying names with parts and components.
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SpaceX
Crew Dragon |
After SpaceX nailed a critical test flight, its Crew Dragon capsule is ready to fly astronauts. (22 Jan 2020) It was the mother of all un-piloted tests: send the Crew Dragon space capsule up atop a Falcon 9 rocket, create a simulated disaster 85 seconds into the flight while the vehicle is traveling at mach 2.2, and abort the mission. In the process, the Crew Dragon was to ignite its eight Super Draco thrusters, separate from its trunk section, use smaller thrusters to reorient the craft's heat shield for re-entry, then deploy two drogue—followed by four main—parachutes for a soft landing in the ocean. The atmospheric pressure, meanwhile, would destroy the Falcon 9 in a fiery burst. And all of that, miraculously to the untrained eye, is precisely what happened. We remember watching the very first Space Shuttle launch in April of 1981 with Young and Crippen onboard. Although Crew Dragon was "manned" only by two anthropomorphic test dummies, it brought back memories of that incredible spring day. The battle between SpaceX and Boeing (BA), which just completed a failed mission of its Starliner capsule, is suddenly looking like no contest. It could be as soon as this March, just two short months away, that the SpaceX Crew Dragon carries two astronauts from American soil to the International Space Station, marking America's triumphant return to manned spaceflight. Disgracefully, the country willingly ended that capability back in 2012. As for Boeing, we expect it to iron out the multitude of issues with the Starliner, but we are yearning for the days of an independent McDonnell Douglas, before the company was acquired by Boeing. We are in the nascent stages of an unprecedented private enterprise/government partnership designed to take back America's leadership role in space exploration; a role abdicated in 2012. As exciting as the missions will be, investors need to be paying close attention to the publicly-traded players, especially those lesser-known companies in the support role. Think names like Astrotech (ASTC), Moog Inc (MOG.B), Ducommun (DCO), and Aerojet Rocketdyne Holdings (AJRD).
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SpaceX
USSF |
The United States Space Force officially completes its first launch with the SpaceX Falcon 9. (06 Jan 2019) A historic day. The United States Space Force (USSF) just kicked off its existence by managing the first launch of 2020, a SpaceX Falcon 9 rocket carrying the third batch of sixty Starlink satellites into orbit. The USSF operation went flawlessly, with the first stage of the Falcon 9 rocket, which was making its fourth flight, touching down perfectly on its drone ship landing platform named "Of Course I Still Love You." With 162 Starlink satellites currently in orbit, SpaceX is now in charge of the world's largest commercial satellite constellation. The company plans to begin operating the network, which will ultimately provide high-speed, low-latency internet access across the globe—no matter how remote the location, later this year. Launches are inherently risky, but SpaceX is making the event seem commonplace—an enormous milestone for spaceflight, and one which has never existed before. The company's most important test to date will come later this year when SpaceX astronauts make the maiden (manned) voyage aboard the Crew Dragon space capsule.
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Virgin
Galactic |
With Virgin Galactic's IPO on the near horizon, Boeing takes a stake in the venture. (08 Oct 2019) Sir Richard Branson's space travel startup, Virgin Galactic, is scheduled to become a publicly-traded entity at some point in the fourth quarter, and Boeing (BA $292-$377-$446) wants in on the action. The world's largest aerospace company (double the size of Airbus) will use its venture arm, HorizonX, to buy a $20 million stake in the firm in exchange for an equal amount of shares after it opens for trading. Marketed as the first space tourism company, Galactic will offer rides to the edge of space in its six-passenger Unity spacecraft. The craft will liftoff from and land at Spaceport America, the company's FAA-licensed space operations center not far from Las Cruces, New Mexico. Over 600 customers have already signed up for the $250,000 flight. Branson's goal is to greatly reduce the cost of the trip as the journey becomes commonplace. Virgin Galactic currently has an enterprise value of around $1.5 billion. Investors will have an abundance of opportunities to invest in the commercial push into human spaceflight. While company's like SpaceX (privately held) and Virgin Galactic will take the headlines, there will be a plethora of small- and mid-cap support companies providing the hardware and services for these ventures. The key is to discover those firms before their names become well known.
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Virgin
Galactic |
Virgin Galactic, with paying passengers in tow, appears set to go public this year. (09 Jul 2019) It will certainly be the world's first publicly-traded space tourism company. Sir Richard Branson announced plans to IPO Virgin Galactic this year, and he assured potential investors that the company would be profitable within two years. In fact, six hundred individuals have already ponied up an aggregate of $80 million for tickets on the spacecraft, which separates from a specially-designed aircraft at 50,000 feet, rockets to a distance of 62 miles from earth (380,000 feet, or the very edge of "space"), then returns for a runway landing. While the entire trip, from booster aircraft takeoff to spaceship landing, would last just under three hours, the six passengers on each flight would be weightless for only around five minutes. Earlier this year, two Virgin Galactic pilots earned their civilian astronaut wings, taking the spacecraft Unity to an altitude of 60 miles. Chief Astronaut Instructor Beth Moses rode as a passenger on the flight. While the company currently sets the price of a ticket at $250,000, Branson said he expects those prices to fall substantially as the journey becomes more commonplace, and other entrants begin offering flights (think SpaceX and Blue Origin). We are truly witnessing the nascent stages of a massive movement into space travel. While an investment in Virgin Galactic, which has an enterprise value of around $1.5 billion, would be an extremely risky proposition, the opportunity for investors in this industry will be prolific. Now
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SpaceX
2019.02.28 |
Forget the monkey or the dog (sick communist Soviets), SpaceX will place a spacesuit-wearing dummy on its first Crew Dragon launch. This Saturday marks a huge milestone on the road to American astronauts returning to space via American ships (we still find it disgusting that this lapse in capabilities was ever allowed to happen—actually, orchestrated). SpaceX plans to make its first Crew Dragon test at 0248 local time, as the Falcon 9 rocket carrying the capsule is set to launch from Cape Canaveral Air Force Station, lighting up the pre-dawn sky. Ultimately, the Crew Dragon will shuttle astronauts to and from low Earth orbit (LEO). While no humans (or animals) will be on this first test mission, the capsule will have someone at the controls: a spacesuit-wearing anthropomorphic test dummy, or ATD. The sensor-laden dummy will measure the flight responses on the human body and various metrics of the environment. While NASA didn't request the ATD for the flight, how much cooler will it be for the crew of the International Space Station to open the hatch and find a traveler in the commander's seat? Based on his fight with the SEC, we now hope that Elon Musk keeps SpaceX private. And we are sad about that new opinion, as we were really looking forward to picking up some SPCX (just guessing) stock after the IPO.
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SpaceX successfully tests an operational version of its new Raptor engine, moving the needle closer to Starship's first launch. (05 Feb 2019) Imagine 31 Raptor engines, each providing 200 metric tons of power, grouped together to launch into space one of the biggest rockets ever built. That vision came a step closer to reality this past Sunday, as Elon Musk's SpaceX successfully test fired one of the operational, methane-burning Raptor engines at the firm's Rocket Development and Test Facility in McGregor, Texas. Ultimately, Starship (formerly known as BFR) will launch humans into space on a journey to Mars, with three vacuum-optimized Raptors propelling the upper stage toward its destination. The first major milestone, however, should come this year as Starship proves it can deliver payloads into low Earth orbit (LEO). An interim step will come when the craft carries Japanese billionaire Yusaku Maezawa and a half-dozen others on a six-day trip around the moon and back. Space travel has been one of the most well-protected domains on Earth, as very few nations and very few companies (Boeing, Lockheed Martin) have the capital and experience to undertake such ventures. SpaceX has shifted that paradigm, opening the door for other private companies to join the race, and literally ushering in a new era of space travel. Investment opportunities within this industry will be abundant.
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SpaceX
BFR BFS |
SpaceX to build and fly a "mini-BFR" to launch atop Falcon 9 as soon as next year. (09 Nov 2018) Anyone following the renaissance that is the American manned space program is probably familiar with SpaceX's planned BFR, or Big Falcon Rocket (although the F is often replaced with a more colorful term by the founder). This is the ship designed to take men and women to Mars and beyond. Actually, consider the BFR to be the equivalent of the Saturn V which launched Americans into orbit on their way to the moon. The BFS (Ship) would be the equivalent of the manned capsule which contained the lunar lander. Now, the company has created a stepping stone, a "mini-BFS," that it plans to build and subsequently test atop a Falcon 9 rocket as soon as June of 2019. Founder Elon Musk tweeted hints of the spaceship, saying it would be used to test the new technologies and recovery strategy of the system. SpaceX has now successfully launched seventeen Falcon 9 missions thus far in 2018.
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