3 top space stocks to consider buying for an ISA in April
Looking for space stocks to buy? I don’t blame you, as McKinsey reckons the global space economy could hit $1.8trn by 2035.
Showing this figure isn’t just science fiction, we had two developments last week. First, there was NASA’s successful Artemis II rocket launch that sent humans towards the Moon for the first time in over 50 years. Second, industry juggernaut SpaceX has reportedly filed to go public at a potential valuation of $1.75trn.
Here are three stocks to consider buying for exposure to the booming space economy.
SpaceTech fund
Let’s start with Seraphim Space Investment Trust (LSE:SSIT). This £365m trust invests in earlier-stage growth companies involved with space technology (SpaceTech).
The stock’s had an amazing run, going from 51p to above 150p in just 12 months.
However, this hasn’t been driven by mere hype, but actual tangible progress made by its portfolio companies. In March, it announced a 20% jump in its net asset value (NAV), or an increase of £56.4m.
For example, Finnish microsatellite firm ICEYE secured a massive â¬1.7bn space reconnaissance contract from the German government alongside its partner, defence giant Rheinmetall. ALL.SPACE, HawkEye 360, and D-Orbit also received meaningful valuation uplifts.
It’s worth noting that seven of the trust’s top 10 holdings expect to report EBITDA profitability in 2026. So these are far from starry-eyed start-ups in garages.
The biggest risk would be Europe turning off the funding tap. However, while this can’t be ruled out, I think President Trump threatening to leave NATO makes it even more likely that Europe spends hundreds of billions building out its own space and defence capabilities.
If so, then many of the key holdings here should benefit massively. As I write, the trust’s trading at a 5% premium to NAV, suggesting that its valuation is far from bonkers.
European blue chip
Next, we have Airbus (ENXT:AIR), whose share price is down roughly 22% since January.
While primarily a maker of passenger jets, Airbus also has a Defence and Space division. Last year, revenue here increased 11% year on year to â¬13.4bn, while order intake surged to a record â¬17.7bn.
Airbus built the European Service Module for NASAâs Artemis programme, providing power and life support for the Orion spacecraft heading to the Moon.
Rather than a pureplay space stock, Airbus is a stable, profitable giant with a massive backlog of 8,754 commercial aircraft. Supply chain shortages could result in production delays, but the forward price-to-earnings multiple of 22 looks reasonable to me.
AIM-listed stock
Returning to SpaceX, let’s end with Filtronic (LSE:FTC). This is a small-ish UK company with a £435m market-cap that designs and manufactures advanced radio frequency (RF) solutions for the space, aerospace and defence, and telecoms markets.
A deal signed with SpaceX to support SpaceX’s Starlink satellite constellation has been transformative. Revenue ballooned from £16.3m in 2023 to £56.3m last year.
The flip side to this is that SpaceX now makes up the vast bulk of revenue, which adds concentration risk. However, it’s worth noting that Filtronic is having success diversifying revenue streams.
For example, last week it was selected by a major European defence firm to provide it with components, building on an $8m contract won with the US army the week before.
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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Filtronic Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
