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On Nov. 14, I told you how SpaceX's Starlink global constellation of 1,440 satellites was set to lift off and beam Web access down to huge swathes of the Earth.
That's an ambitious plan, to be sure. There's just one problem: Outer space is filling up with dangerous junk. According to the United Nations, there are around 3,100 dead satellites up in orbit.
That may not sound like the most pressing problem, but each satellite moves at around 7,000 miles per hour, and at those speeds, collisions are catastrophic. If you imagine trying to do jumping jacks with thousands of 00-buckshot pellets whizzing by over your head, you have some idea for the tragic potential of a collision with a manned spacecraft.
With 10,000 new satellites slated to be launched in the next three years, the potential for danger is soaring. Not only that, but forecasts suggest civilian space travel take off over the next few years, to the tune of around $1 trillion; just last week, Virgin Galactic Holdings Inc. (NYSE: SPCE) scored a key NASA contract.
As long as the threat of collision is up there, though, this new sector and its incredible growth potential are at risk.
Luckily, I've identified a company focused on keeping the crowded space above the Earth safe. It just made a key merger to become a true space traffic controller.
Let me show you why it's set to double earnings in just a little over three years...
The Right Stuff... and More and More of It
Ever since the Russians launched Sputnik 1 in 1957, humans have put 9,456 satellites in space.
Today, the top five countries with operational satellites are the United States, China, Russia, the UK, and Japan.
Yet even these numbers understate the true scale of what's going on.
The militarization of space is heating up. The United States and Russia are developing hypersonic missiles and potentially hypersonic manned craft as well as a new generation of communications, intelligence, lasers, and weapons.
China and India, as well as Europe and Japan, aren't far behind.
And remember, launching satellites is only a part of SpaceX's mission. Since November's first successful, manned Crew Dragon launch, the company will be sending increasing numbers of astronauts into space.
SpaceX also plans to ferry civilians into space. Ditto Virgin Galactic, which plans suborbital manned flights starting next year. At deadline, Virgin said it hoped to launch a test flight sometime this weekend, weather permitting.
In the interim, NASA said it's partnering with Virgin to deliver payloads needed for research and development and future missions.
Make no mistake. The space economy is on the move. It's now pegged at $350 billion.
But analysts say that with civilian travel, the value will conservatively hit $1 trillion by the 2040s. Bank of America says it could go as high as $2.7 trillion.
And in today's tech-driven economy, a growing breakthrough sector is exactly where you want to have your money.
Once you find that sector, you want to have a rock-solid firm with excellent financials and business prospects to make sure that your portfolio gets its share of the sector growth.
I've got one standout choice that ticks all of those boxes just below (and, by the way, if you click here you can learn about 31 other standout choices [as well as 19 to ditch immediately] to bolster your portfolio in 2021.)
An Original Simulation Firm
Enter ANSYS Inc. (NASDAQ: ANSS), an engineering simulation and software company.
What does Ansys have to do with space?
Recently, the firm announced that it's buying 30-year-old Analytical Graphics for $700 million. I believe this is a great move.
Analytical Graphics models and tracks satellites to provide key data on their orbits to make sure none of them run into other satellites.
The merger means Ansys is now in line to be the space traffic cop for the 21st century. And given the fact that the United States puts up more satellites - private, institutional, and governmental - than any other country, this is a big job.
And the fact is, Analytical Graphics has partners all around the world that use its services. Up to now, it has been privately held but has a global reputation for managing some of the most sensitive information that its clients have.
That is important within the defense, intelligence, communications, and aerospace industries.
More Than an Outer Space Traffic Cop
While this new acquisition is exciting, given the huge growth in space activity that's already happening, it's hardly the only thing Ansys has going for it.
For one thing, it's a simulation company. That may not sound too sexy or important at first, but it helps explain why the firm boasts a roster of elite clients.
In aerospace, it's top companies like Lockheed Martin Corp. (NYSE: LMT). In construction, it's the likes of Caterpillar Inc. (NYSE: CAT), ABB Ltd. (NYSE: ABB), and Rockwell Automation Inc. (NYSE: ROK). In chips, it's Nvidia Corp. (NASDAQ: NVDA) and Samsung.
The list goes on, as do the industries it influences. Here's how the company explains it all:
"If you've ever seen a rocket launch, flown on an airplane, driven a car, used a computer, touched a mobile device, crossed a bridge, or put on wearable technology, chances are you've used a product where ANSYS software played a critical role in its creation."
Growing at 17% a year, the simulation engineering market is expected to hit $28 billion by 2026.
Basically, simulation software allows manufacturers to "build" products virtually and test them before actually building them.
With the processing power of computers now, this allows companies to simulate even the most complex products and test various metals and alloys for parts using software rather than building physical models.
This makes for better, faster, and cheaper prototyping. Whether it's a turbine engine, a semiconductor, a bulldozer, or a 5G base station, simulation engineering is a huge step forward for scores of industries.
And Ansys is at the top of the pack.
When it comes to aerospace, the ability to simulate how well a structure can survive in the grueling environment of the moon or Mars is a significant advantage.
So, it's no surprise then that SpaceX is a top customer of Ansys products. But on a more earthly level, Ansys is a leading technology provider for every industry that's moving the world forward.
We're talking 5G telecom, autonomous vehicles, drive trains for electric vehicles, and of course defense, intelligence, and aerospace work.
A Double in Three Years
Ansys, headquartered in Pittsburgh, Pa., has been around since 1970, so it isn't a Silicon Valley upstart that moves fast and breaks things. It moves efficiently and builds things.
But its business is globally diversified. About 50% comes from the Americas, 25% from Europe, and the other 25% from Asia.
High tech makes up 32% of its revenue, automotive 19%, aerospace 17%, and industrial equipment 10%.
The firm announced third-quarter financials on Election Day, and it beat earnings and hit record revenue numbers.
And Ansys is growing earnings by 22% a year, which means earnings are set to double in 3.25 years.
So, as our satellite use grows safely in the years ahead, thanks to Ansys, so will a portfolio that holds this great stock.
But your portfolio will most likely still have room for these must-have stocks...
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.