Our Stock of the Week is Redwire Corporation (RDW). RDW describes itself as:
“A global space infrastructure and innovation company enabling civil, commercial, and national security programs. Redwire’s proven and reliable capabilities include avionics, sensors, power solutions, critical structures, mechanisms, radio frequency systems, platforms, missions, and microgravity payloads. Redwire combines decades of flight heritage and proven experience with an agile and innovative culture. Redwire’s approximately 700 employees working from 14 facilities located throughout the United States and Europe are committed to building a bold future in space for humanity, pushing the envelope of discovery and science while creating a better world on Earth. For more information, please visit www.redwirespace.com.”
The company has a large backorder of business, which increased 20% in the second quarter to $354 million. In its most recent quarter, sales increased 30% to $78 million. The company is moving toward eps breakeven by the end of next year.
The main driving force for RDW and the space industry in general is the increase in the number of satellites that are being launched, defense applications, in-space manufacturing, and lunar exploration. As of April 2020, there were roughly 6000 satellites in orbit. It is estimated that there will be an additional 50,000 satellite launches by 2030.
The company completed the acquisition of Hera Systems on September 3. Hera Systems expands Redwire’s spacecraft portfolio to support specialized national security space missions in geostationary orbit (GEO).
The space industry is very active right now, as reflected in RDW’s chart. After a big run to the $8 level, it has pullbacked and consolidated. It is pushing back up to the $7.50 level and may gain some additional momentum if market conditions stay strong.
As always, we would not chase the stock to start the week but would look to aggressively trade it as it develops.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing no positions in RDW. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
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