The aerospace and defense industry can seem quite complicated when it comes to investing. Because of the sensitive nature of these businesses – with their focus on defense contracts, national security, and military spending – there are often special considerations when picking a stock. In addition, with the industry’s ups addition downs over the past few years, finding great stocks that meet your investment needs isn’t always easy. However, if you have a long-term view and know what to look for in an aerospace & defense stock, you can make intelligent choices that will pay off later.
Arconic is a manufacturer of aluminum and other engineered products and materials. The company was formed after Alcoa’s aluminum business’s spinoff in 2017. Its customers are in the aerospace, automotive, commercial transportation, construction, packaging, and industrial markets. Arconic is one of the biggest aluminum manufacturers in the world and is a major supplier of materials to the aerospace industry. Aircraft are primarily made of aluminum, and demand for commercial aircraft is expected to grow significantly in the coming years. As a result, you can expect robust demand for aluminum from the aerospace industry, which should be suitable for Arconic’s top and bottom lines. Moreover, Arconic’s exposure to the automotive and construction sectors should provide additional support for the company’s growth. Arconic is an excellent bet for long-term growth thanks to its exposure to the growing aerospace, automotive, and construction industries.
Vertical Aerospace (EVTL)
Vertical Aerospace is a manufacturer of unmanned aerial systems (UAS) and associated products. UAS are commonly referred to as drones, though Vertical Aerospace prefers the term aircraft. The company’s primary products include its V-One and V-19 UAS and its Proteus aircraft. Vertical Aerospace also offers a range of products to support its aircraft, including in-flight data management and analysis software, cloud-based mission planning and execution software, and satellite communications. Vertical Aerospace’s core customers are the U.S. military and government agencies, including the Department of Defense, Department of Homeland Security, the Department of Agriculture, and NASA. The company’s V-19 tactical UAS supports military operations and surveillance missions in challenging environments, such as dense forests, mountainous terrain, and desert regions. Vertical Aerospace also developed the Proteus aircraft to reduce the cost of commercial aircraft significantly. The Proteus is designed to fly autonomously and without human intervention. Vertical Aerospace envisions a future where commercial flights are fully automated, and the pilot is no longer needed.
Virgin Orbit Holdings (VORB)
Virgin Orbit is a developer, manufacturer, and operator of air-launch systems. The company was created after Virgin Galactic, a space tourism company owned by Richard Branson, acquired the aviation company The Spaceship Company (TSC) in 2018. Virgin Orbit builds LauncherOne, a launch vehicle carried by a modified Boeing 747-400 aircraft, and releases a rocket at high altitude after takeoff. Virgin Orbit’s customers include government agencies and commercial satellite companies. LauncherOne’s primary advantage is that it can carry smaller satellites into lower orbits than those of rockets launched from the ground. This is particularly important for small satellite companies that cannot afford to purchase and launch their large missiles. Customers can also choose their preferred launch date and time, which is impossible for ground-based rockets that are often subject to weather delays. The company also offers rideshare services, which allow customers to piggyback on the same flight as other satellites. Virgin Orbit planned to begin commercial launches in 2020.
Planet Labs PBC (PL)
Planet Labs is a commercial remote sensing company that produces high-resolution earth images using low-cost spacecraft. The company’s core product is an orbiting satellite network that images the earth’s surface and collects various data, such as temperature, humidity, and particulate matter. The images and data collected by Planet Labs’ satellites are used for weather forecasting and climate change monitoring, disaster response, agriculture monitoring, urban planning, and wildlife conservation. Additionally, the U.S. government has used the company’s satellites for national security purposes, including surveillance and mapping. As a result, the growing demand for earth imaging data is expected to be robust in the coming years, making Planet Labs an attractive investment opportunity.
The aerospace and defense industry is a complex one when it comes to investing. There are often special considerations when picking a stock, such as its exposure to military spending. Finding great stocks that meet your investment needs isn’t always easy, but if you have a long-term view, you can make intelligent choices that will pay off later. If you’re looking for aerospace and defense stocks to buy, research each company carefully and consider their long-term prospects. When you know what to look for in stock, you can find excellent investment opportunities that will pay off in the years ahead.