3 Ways To Profit From Trump's Space Force

David Goodboy's picture

Wednesday, July 11, 2018 - 4:00pm

by David Goodboy

Reading like a page torn from a 1950s science fiction novel, President Trump ordered the creation of a "space force" as the sixth branch of the U.S. military.

Once I got over the sheer shock of the announcement, my mind quickly focused on the investment potential of Trump's edict. Visualizing a true super bull market with rivers of government money pouring into the private sector, my curiosity was piqued.


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A little research proved I was not alone with these thoughts.

It was thrilling to learn that none other than the venerable investment bank Morgan Stanley published a massively bullish thesis on the economic benefits.

Morgan Stanley's Adam Jonas said, "Our conversations with various actors (current and retired) in the U.S. government, military, and intelligence communities overwhelmingly indicate that space is an area where we will see significant development. He continued, "This development could enhance US technological leadership and address vulnerabilities in surveillance, mission deployment, cyber, and AI."

In fact, Morgan Stanley stated that it believes the space force could fuel a new trillion-dollar economy. Just imagine the explosive stock market boom resulting from such an incredible influx of capital!

To be sure, the space force remains speculative. Despite Trump's zeal for progress, Congress still needs to approve the initiative and its funding. I firmly think it will be accepted. Maybe not right now, and perhaps not precisely as Trump envisions, but a Space Force is an inevitability.

Now is the time for investors to position themselves to ride the wave of Trump's vision!

Not only will the apparent stocks benefit, but many not so obvious names will reap the benefits. Remember, the technology and new frontier of the cosmos will likely create opportunities across a wide range of industries and markets.

These three stocks are ready to gain from the Space Force over the next 10 to 20 years:

1. Lockheed Martin (NYSE: LMT)
Perhaps the most visible company to reap the Space Force gains. Lockheed Martin's primarily serves the U.S. government with NASA and the Department of Defense as clients. Everything from satellites, rocket launching, and ground systems fall under its expertise. There is no question that Lockheed is the best-positioned firm to directly gain from the soon-to-be created Space Force.

Taking a closer look at the metrics, the company boasts nearly $52 billion of revenue with a market cap of $86 billion. The stock yields close to 3%. Boasting revenue of nearly $52 billion, this company is about to thrive with or without the Space Force.

Right now shares are trading lower by around 6% on the year. However, after hitting a low of around $295.00 per share, the stock has turned out to be an incredible buy. Get long on a break out above $300.00 per share with a $400.00 per share longer term. Initial stops are suggested at $277.00 per share.

2. Honeywell International (NYSE: HON)
Another obvious choice for Space Force triggered profits. Honeywell is a leading name in thermal control, environmental command, and life support systems for manned space flight. The company has been deeply involved with NASA since human spaceflight started, making it a clear choice for Space Force gains.

HON yields around 3% and the shares are trading lower by close to 5% on the year.

Shares have formed a triple bottom pattern in the $140.00 zone setting up an excellent buying opportunity. Get long on a breakout of $147.00 per share with a $175.00 per share target. $135.00 per share makes a reasonable risk/reward initial stop level.

3. Boeing (NYSE: BA)
The apparent third choice to gain from Trump's Space Force initiative. Boeing is actively involved in most things aerospace including rocket launch components and satellites.

Unlike the first two names, Boeing is trading higher by over 13% this year and is up by nearly 70% during the last 52 weeks. The stock yields just over 2% and has set up to be a decent buy right now. I like the leading nature of Boeing and the fact that it is higher on the year.

BA has fallen off its highs and is trading below the 50 day SMA, but price remains above the critical 200 days SMA. Shares are consolidating in the $330-$335 per share zone. Getting long on the break out above $340.00 per share with a target price of $427.00 and initial stops at $309.00 per share makes sense currently.

Risks To Consider: While I firmly think it will be launched, the Space Force remains speculative in the short term. Whether or not it pumps up the shares of the listed companies remains to be seen. Always use stops and position size within your limits when investing.

Action To Take: Use the above stocks to get a jump on Space Force profits!

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David Goodboy does not personally hold positions in any securities mentioned in this article.
StreetAuthority LLC does not hold positions in any securities mentioned in this article.