"Winning" (Cestrian Stocks Bulletin #65)

Been a good week.

If you invest in young high growth industries like technology, you can expect to make good money if you are even half good at it. Because in old-line economies like the US, where GDP growth is a couple percent most years, your old-line industries also don’t grow very much and yet attract a wall of capital. So, if you want to chalk up some capital gains rather than a 2% dividend yield, just pick a basket of growth names, don’t buy at an obvious top and then sell at an obvious bottom, be patient, don’t get too stressed when they have a bad day, let time pass, and collect your not-too-hard-earned gains. Rinse and repeat. 

Now, if tech is an adolescent to railroad’s grump-pa, space is merely a toddler. Just getting started. First flush of independence. And whilst it’s still possible in tech to have your heart broken by picking the wrong stock at the wrong time - particularly if you use everyone’s favorite weapons of mass destruction, margin and options - by and large you can print money safely in the sector. Just buy Microsoft and go play golf, for instance. In space, however, it’s very probably going to be the case that many companies won’t survive the harsh environment. It’s always hard to tell this early into a new industry but if we had to call it? We’d say AST Space Mobile is going to cause some regret, and we’d say that SpaceX, once it pogoes onto the public market, will probably irritate Anti-Muskers no end by proving to be yet another cult classic.

Fortunately, we’re here to help. We run the top two space-sector services on the Seeking Alpha research platform. Oh, wait, the only space sector services on the Seeking Alpha research platform. And if you can find a better space sector stock service anywhere out there, we’d like to know about it. We got started in 2017, one of our number attended the International Space University (yes really!) in 2018, and we’ve gone from strength to strength ever since.

And this week? This week, it was a good week. It marked the fastest double-your-money yet in our various stock services. In tech, adolescent remember, the doubles have taken a little while. Fortinet got there in a little under a year, so that was nice. Cloudflare too. 

But space being all hyperactive Sunny-Delight-fueled preschooler, it was inevitable that one of the new crop of space SPACs would deliver the goods sooner or later. (So far, none have flamed out. But there’s time yet).

Yesterday, RocketLab ($RKLB) hit a 100% gain on the common stock since our Buy call just a few months back (actually if you had your wits about you, and made like it was 2020, buying that flailing dip, you could have doubled your money in just a few weeks). And making that initial Buy call, the day that the SPAC deal was announced, was an easy decision for us. It had three factors going for it. One, RocketLab is a real business with real rockets that have really gone to space and deployed real satellites to real orbits. Two, the founder-CEO is a rock star and never saw a PR opportunity he didn’t like (this is a good thing for the stock). Three, the sponsor of the SPAC structure was Vector Capital which, whilst not a household name even in the tech buyout circles in which they operate, most certainly do know what they are doing. So, simples, Buy, we said. 

Now, as you probably know, most of the current SPAC crop come with both common stock and longish dated warrants available to buy. These warrants tend to be a way of (a) juicing your returns (b) breaking your heart by collapsing into nothing and/or © breaking your wallet by being redeemed for cash by the underlying company at a time of their choice. The warrants need to be handled with care, and our approach to them has reflected that. Whilst we don’t formally cover any kind of derivatives in our services, we do sometimes buy warrants and options in staff personal accounts, and where we do that in covered stocks, then just like all our trades in covered stocks we flag what we’re buying and selling and when and why - before we trade, so our subscribers can always trade before we do.

And some of these space SPAC warrants have proven very lucrative indeed - none more so than RKLB.W. With the move up in the stock this week, the warrants have been on an even greater run. Within our members, some sold warrants a few days back, we ourselves sold them yesterday, and our bravest subscriber, christened (by us) the Warrant King, sold them today.

Here’s a nice comment from the Warrant King in our chat service today. (Username has been removed to protect the wealthy).

And here’s another satisfied subscriber:

Now, the timing of $RKLB’s direct ascent has been luck, no doubt. But we stand by the judgment call in the stock selection. We can’t promise you a double on anything and we certainly can’t promise you nearly a triple in nine days. But we can promise you that we will bring to bear all our space sector expertise to help you make the most of the opportunities the sector presents, and at least as importantly, to help you avoid the heartbreak of picking the wrong names altogether. We made good money on Momentus Space ($SRAC) for instance, before the SPAC deal went south. (And that same Warrant King made big returns on that name too). By the time things started to go wrong, we were long gone, gains cashed.

Space isn’t all casino SPAC names either. We’ve recently chalked up 30% gains in the world’s most boring company, Iridium Communications ($IRDM); and we’ve banked more checks than we care to remember from the gyrations of Maxar Technologies ($MAXR). Oh, also we called the sale of Aerojet Rocketdyne ($AJRD) ahead of time and banked some nice free money there too.

So if you want to get money to work in the space sector, and to learn how to sort the good from the bad, the high risk from the low risk, the “could get acquired for a big price” from the “might pay a dividend soon”, join one of our services. There are two options available.

Space Select does exactly what it says. This is a low cost space-only service which gives you articles on key stocks at key times and features an increasingly busy chat service. You get alerts before we buy or sell anything in our coverage universe. It’s just $39/month or $299/yr. You can read our great reviews here and sign up here.

Growth Investor Pro is our top-tier service. It’s where we live most of the day. You get our best space and tech coverage, a real time chatroom with direct access to senior Cestrian staff, a great community in chat, and again, alerts whenever we buy or sell anything in the tech or space coverage universe. Cost is usually $199/month or $1999/yr, but during September we’re offering you the service for just $159/month or $1599/yr. We’re grateful for these great reviews and you can sign up here.

We hope to see you soon in one of our chatrooms!