The space sector is gaining traction with investors again amid increased activity among names spanning US aircraft maker Boeing (BA:NYSE), defence giant BAE Systems (BA.) and Elon Musk-backed SpaceX.
On 5 June Boeing launched its long-delayed astronaut capsule Starliner towards the International Space Station with two Nasa astronauts on board.
Butch Wilmore and Suni Williams – the astronauts in question – will be testing the capsule on a mission which is expected to last more than a week.
A day later SpaceX, which has been manufacturing and launching rockets and spacecraft for a decade, followed this by enjoying a successful launch with its huge Starship rocket at the fourth time of asking.
Back in February this year, defence giant BAE Systems completed the $5.6 billion acquisition of Ball Aerospace which makes ‘mission-critical space systems’ and produces ‘defence technologies across air, land and sea.’ The deal was seen by analysts as a means of deepening BAE’s relationship with Nasa.
These developments have refocused investors’ attention on space-related stocks and funds like Seraphim Space Investment Trust (SSIT).
Seraphim has gained 91% year-to-date – going from one of the worst performing investment trusts of 2023 to one of the ‘best-returning’ funds year-to-date ‘by some distance’ according to Liberum.
Notably the shares are still trading at discount from the IPO price of 100p, putting 2024’s gains into perspective and highlighting this remans a nascent and higher risk area to invest in.
The company recently announced the sale of 100% of its interest in nine-early-stage portfolio companies to Seraphim Space Ventures II LP – a new venture capital firm managed by Seraphim Space Manager LLP.
The reasoning behind this is so the company can concentrate resources on ‘more mature assets’.
Three of the trust’s biggest holdings ICEYE, D-ORBIT and HawkEye 360 having closed sizeable new rounds of funding since the start of 2024.
Spire Global (SPIR:NYSE) has just entered into a multi-million-dollar deal with a financial firm to provide its high-resolution weather forecast model.
Spire has collaborated with Nvidia (NVDA:NASDAQ) to advance its artificial intelligence-driven weather prediction capability.
AST SpaceMobile (ASTS:NASDAQ) has also signed commercial agreements with both AT&T (T:NYSE) and Verizon (VZ:NYSE).
Boggett tells Shares magazine a new growth area is the removal of space debris, repairing satellites and end of life care for satellites. ‘A market that simply didn’t exist five years ago,’ says Boggett
One company that Seraphim invests in operating this new area is Astroscale (186A:TYO) which debuted on the Tokyo Stock Exchange on 5 June. The IPO raised circa $153 million through a mix of primary and secondary capital.
Although the issue represented a circa 40% discount to the price of Astroscale’s previous private financing round in the fourth quarter of 2023, the company traded up materially on the first day of trading.
Disclaimer: The author (Sabuhi Gard) owns shares in Seraphim Space Investment Trust.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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