One Giant Step For Internet-Kind

By Lou Basenese, on Tuesday, August 18, 2020

Back in May, I put an extraterrestrial investment opportunity on your radar — satellite-based internet.

You’ll recall, this is a potential $1 trillion market that involves putting “low earth satellites” the size of refrigerators into orbit.

Once they’re in orbit, they can beam ultra-fast internet to connected cars, smartphones, and billions of other IoT devices.

All the titans of tech are in on the action, from Elon Musk and Mark Zuckerberg to Jeff Bezos.

And based on the latest developments, we just took a giant step forward toward it becoming a reality…

Reddit Reveal

It appears Elon Musk’s ambitious low-earth orbit satellite company, Starlink, has already started delivering internet to beta users.

Based on several posts to Reddit, the early speed tests make it clear: satellite internet will indeed be capable of delivering broadband speeds.

As you can see below, the tests showed download speeds as high as 60.24 megabits per second (Mbit/s) and upload speeds as high as 17 Mbit/s. That easily exceeds the FCC’s thresholds for qualifying as “broadband” service of 25 Mbit/s download and 3 Mbit/s upload.

That’s a big deal, as the Institute for Local Self Reliance found that almost 50 million Americans live in unserved or underserved rural areas.

In other words, they currently don’t have access to fast, reliable internet.

No Missed Connection Here

Despite the impressive speed tests, it’s important to note that we’re still in the early innings of this growth opportunity.

Consider:

  • Starlink’s coverage is limited to the Northern US and Southern Canada right now. By year-end, though, the company will put another 1,500 satellites in orbit to completely cover North America.
  • Pricing and packing for Starlink’s service remains a mystery. But that’s not stopping bandwidth-starved consumers from expressing interest. The company recently told the FCC that "nearly 700,000" people have already registered for information on Starlink service.

Here’s the key takeaway: we’re now moving from the theoretical potential for low earth orbit satellites to deliver broadband internet…

To this becoming a big, real-world commercial opportunity.

And for investors like us, here’s the thing:

Investing during such transition points often leads to faster gains… and higher gains.

Avoid the “Obvious” Choices

That’s why, a few months ago, I started encouraging you to position your portfolio to profit from the burgeoning space race.

Of course, I was clear back then that you should avoid buying the obvious choices — the long-suffering satellite operators like Intelsat.

And good thing I warned you:

The company filed for bankruptcy within weeks of my warning, revealing the problem with early entrants in the satellite space.

They’re saddled with legacy costs and bloated with old strategies, which makes it difficult to pivot to capitalize on the new market opportunity.

Profit from the Space Race

Instead, I recommended that you consider a more diversified and dynamic option: the Procure Space ETF (UFO).

You’ll recall, the majority of its holdings are in companies that derive at least 50% of their sales from space.

What’s more, nearly all of its ten largest holdings are in companies that own or operate satellites.

In other words, this ETF offers us the closest thing to a pure-play investment in the space race. Without any single company risk.

Best of all, it’s already delivering profits.

Since my original research note, the ETF is up 25%, outpacing the S&P 500 index by a full five percentage points.

I expect this outperformance to persist. For years. So if you missed out on the initial recommendation, consider this your second notice…

The new space race is preparing for blast-off. Don’t miss out!

Ahead of the tape,
Lou Basenese
Lou Basenese

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