On July 20th, if everything goes as planned Jeff Bezos will go to space on the first passenger flight of Blue Origin, the privately held company that he founded.
He’ll be adding to a list of bragging rights that includes being one of the richest people on earth.
It also includes founding Amazon, laying the groundwork for the global e-commerce economy now worth more than $10 trillion, and giving rise to the $305 billion global cloud computing market by renting out spare servers.
More importantly, he’s going to be giving us an enormous chance for massive profits in the space travel industry.
I believe this flight will be a big catalyst for the coming era of space travel expected to be worth $800 billion in roughly the next decade.
Today, I’m going to reveal a great way to cash in on this new industry with a stock that has is roughly doubling the market’s returns…
To The Stars
July 20 might seem very soon, but Blue Origin is far from a newcomer to the field.
Bezos founded it in 2000 after a lifetime of interest in space. The firm now employs some 3,500 people working on rocket engines, rocket design, and a module for space travel.
Spaceflight itself is much older than that, of course. But for decades since October 4, 1957, when the Soviet Union launched Sputnik 1, the first successful manmade satellite, into orbit, spaceflight was the reserve of governments.
Eventually, satellites started being launched by businesses and scientists, but manned spaceflight remained reserved only to the largest governments.
In July, Blue Origin hopes to change that. And beat fellow tech billionaire Elon Musk and his SpaceX to the punch.
Unfortunately, Blue Origin is privately held, so there is no way for us to invest in Bezos’s space firm directly. So is SpaceX.
Meanwhile, the spaceflight companies that are publicly traded don’t have the decades of experience or the multiple hooks of the company I have in mind.
See, the firm I want to tell you about is a major player in the next generation of space travel, which some experts expect to be an $800 billion industry in the next decade.
This company has supported both spaceflight and deep space exploration for NASA and private industry for 60 years, providing IT, engineering, and science to clients.
In 2019, this company won a $3 billion NASA contract for IT services. It has supported 87 missions from various firms to the International Space Station and is heavily involved in the Artemis moon missions.
And the great thing about all this? The US government is a very reliable customer. That means regardless of the ups and downs on planet Earth, this company is making money keeping its head in the stars.
The firm is none other than Leidos Holdings Inc. (LDOS). To both government and private clients, Leidos provides a variety of space technology.
This includes automatic identification of objects and their location from satellite images, through spaceflight crew training, and even planning, preparing, and packing equipment going to the International Space Station.
Leidos also researches, produces, and packages the specialized dry food that space travel requires, all while keeping to the very serious health and safety standards required for food being delivered to such an isolated location.
And when it comes to unmanned space exploration, Leidos is also a key player. The firm makes the advanced infrared sensors that the military uses to detect hostile missile launches from orbit.
For private industry, it also provides the radiation-shielded computer chips to power satellites in orbit, as well as the automation systems necessary to keep space satellites working.
Thing is, Leidos is a great twofer with a lot of sales outside of the space industry.
It gained a big leg up when it bought Lockheed Martin Corp.’s (LMT) Information Systems and Global Solutions business for $4.6 billion in 2016.
In 2019, Leidos followed that up by buying Alabama-based aerospace firm Dynetics for $1.6 billion to further expand its exposure to hypersonics, space, and weapons solutions, including experimental vehicle-mounted laser weapons.
This is all part of a longer-term strategy to build out its aerospace work through its longstanding government and Pentagon relationships.
As space continues to grow in importance for the U.S. military, amid increasing reliance on satellites and China’s rapid development of military space technology, these acquisitions will fuel Leidos’s growth.
Down to Earth
The firm has also been expanding its defense offerings closer to Earth. In early May, Leidos closed the $380 million purchase of Gibbs & Cox Inc., the largest independent ship design firm that focuses on naval vessels.
This fits in greatly with Leidos’s maritime unmanned vessels that can act as smaller support craft to naval vessels.
The company is also pioneering AI for the Navy, making naval vessels smarter and helping them run themselves more so that sailors can be kept further from harm’s way.
To see just how important defense is for the company, consider that 20% of Leidos’s employees have a past in the Department of Defense.
It shows us the kinds of huge profit opportunities to be found in companies on the cutting edge of America’s defense needs. That applies in space, on the ground, and even in cyberspace.
But I talk more about how the U.S. government, along with leading tech companies, are fighting to defend America’s place in cyberspace, and how it could mean massive profits for you, right here.
In the meantime, Leidos’s approach is already paying off, as they just had great quarterly earnings. Per-share profits in the most recent quarter were up 77.5%.
This helps explain why the stock is back in a strong uptrend. It had sold off earlier in the year along with other defense plays. But it bottomed out on February 26.
As I’m writing this the stock is up 20.5%, nearly double the S&P 500’s 11.25% gain over the period.
This is the kind of stock you can count on to benefit from the coming era of space tourism for many years to come as it expands the value of your holdings.
Cheers and good investing,
Michael A. Robinson