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We're At Buy On Spire Global, The Best New Space Stock You've Never Heard Of

Mar. 09, 2021 5:58 PM ETSpire Global, Inc. (SPIR)43 Comments


  • Spire Global, a low cost vertically integrated earth observation business, is slated to merge with NavSight Holdings, a listed SPAC.
  • Unlike other purely speculative space SPAC deals, Spire is a real business with its own intellectual property, high end customer base and sustained revenue growth.
  • Perhaps because of this very grounded nature, and certainly in part due to the current tech sell-off, the stock remains under the radar.
  • We think Spire is a compelling long-term Buy - it's our top pick among the current crop of space companies coming to market.
  • Looking for more investing ideas like this one? Get them exclusively at The Fundamentals. Learn More »

DISCLAIMER: This note is intended for US recipients only and in particular is not directed at, nor intended to be relied upon by, any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.

Deflation Reaches Space

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Cestrian Capital Research, Inc has a team of senior investors contributing work managed by founder-CEO Alex King, a three-decade pro investor.  We're a fiercely independent, very serious SEC-regulated research firm.  On Seeking Alpha we publish a handful of public articles, but our best work here is in our subscription service, Growth Investor Pro.  We provide market-neutral research with ideas that can make money if the market is going up, down or sideways.  We cover a wide range of individual stocks and ETFs, options strategies, macro insight, hedging, risk management and more.  Learn more >> https://seekingalpha.com/checkout?service_id=mp_1221 .

Analyst’s Disclosure: I am/we are long NSH, TSLA, TWLO, PANW.

Business relationship disclosure: See disclaimer text at the top of this article.

Cestrian Capital Research, Inc staff personal account(s) have long holdings in NSH (stock) and NSH.W (warrants), TSLA, TWLO and PANW.

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Comments (43)

I thought the warrants would be like 5 yr calls. It didn't work that way. They nullified them and cancelled me out. How and why, I don't know. I am hoping that a smart lawyer will get up a class action suit about this utterly devious bit of chicanery.
six-oh profile picture
If this is the best new space stock you've never heard of, then I wonder how the worst one is trading right now...

Since this "buy" recommendation was issued, the stock is down a whopping 93% versus +8% for SPY.

Please comment.
Cestrian Capital Research profile picture
@six-oh "A speculative kind of Buy because this is no Microsoft you're buying here. It could all go horribly wrong". As noted above. That's the thing with speculative buys. Sometimes they go well, sometimes they do not. You control the risk with position size, or you don't play at all.
six-oh profile picture
@Cestrian Capital Research

Actually no, risk is controlled only in part by position sizing. The main way risk is controlled is by understanding a company well enough to assign it a fair value and then buying below that level for a margin of safety.

I’d say that now is a much better time to gamble on this stock if you still believe in your thesis.
@six-oh When I bought a position, it was "Well, it's either too the moon or bust." Then I read the Cestrian view and went "OK, confirmed. It's a crap shoot." I don't know if SA will allow that. I'm underwater, but still positive. There's a reverse split coming, by the way. Play the pop, or stay out? Me, I'll just hold.
Wow, any update on this?
@Franfran Well, management is still positive, revenue is up. So that's good. The stock price and cash on hand are down, which means like far to many of the small cap/start-ups I'm holding, there's dilution coming. That's bad. As they said, it's a speculative buy. Holding SPIR/ASTS/PL in my longshot group.
Why not $dmyq seems like it’s a “ real” company and looks profitable.
WiseGuyInvestin profile picture
Do you think shareholders will approve this deal? Seems like it needs to be restructured
WiseGuyInvestin profile picture
@Cestrian Capital Research with stock trading under NAV it looks like investors are saying they don’t think the company is worth it
Cestrian Capital Research profile picture
@WiseGuyInvestin Maybe. FWIW we think it's just been a low profile launch, but, you could be right. We shall see.
Would one buy just the NSH stock or also the warrants? Is it either or both?
Cestrian Capital Research profile picture
@j-mba You can do either, or both.
@Cestrian Capital Research So these warrants are like a call, but theydon't have an expiration date?
@j-mba They do, I'm sure.
WiseGuyInvestin profile picture
Stock continues to go down 1 cent a day so weird... wondering when this is going to come alive
LoveGotham profile picture
Thanks for the article! How does this company compare to SFTW Blacksky?
Cestrian Capital Research profile picture
@avial Spire is a lot more commercially advanced - BlackSky is very early stage
News story about Kerry's coming visit to China. Mentions the US could monitor their greenhouse gas emissions by satellites. Sounds right up their alley.
WiseGuyInvestin profile picture
How long term of an investment do you think this is? Will this be flat all year?
Cestrian Capital Research profile picture
@WiseGuyInvestin We plan to hold for awhile in staff personal account(s). The name is yet to be well publicized and the pending SPAC merger has yet to complete. But if we knew for sure whether it would be flat all year ... we probably wouldn't be spending our days writing about stocks!
grebb profile picture
Durjoy Mazumdar to Lead Spire’s Weather Business
Former IBM’s Weather Business Solutions Global Head of Sales Durjoy Mazumdar Joins Spire as Weather Solutions Sales Executive

“The addition of an industry leader like Durjoy is an important step in executing on our growth strategy across key verticals and geographies. We believe his experience and expertise will help us accelerate our sales and marketing efforts and drive continued product development across our weather segment, further strengthening our competitive advantage,” commented Peter Platzer, Founder and Chief Executive Officer of Spire.

Spire produces precise atmospheric radio occultation measurements, which can drive valuable weather prediction services. Collecting satellite AIS, satellite ADS-B, and RO weather data, Spire’s space-based data can be combined and easily integrated into customers’ existing models and data systems to achieve a wide swath of weather-impacted business objectives.

Tom Maha profile picture
Nice article as always. Thank you. One question around their competitive moat. SPIRE said in company presentation on page 14.
"Maintain ~20 domestic, regional, and international licenses
for space and ground-stations that are difficult to replicate
and widen the competitive moat"

1.Do we know where those stations are?
2.Do you think it is something the competitor can replicate? Perhaps, it would require less than 20 license to enter this business and be compettitive?
3.Could you help elaborate more on few closet compettitors?

Thank you.
Cestrian Capital Research profile picture
@Tom Maha Thanks for the kind words. (1) no, (2) yes this can be replicated - seems to us that the potential moat here is in the sat design and the contracts and (3) we will get to it but haven't done the work yet.
sliman21 profile picture
This looks like the kind of company Cathy Wood would put in her new Space ETF when it gets going.
Cestrian Capital Research profile picture
@sliman21 It does. We can't be sure, of course, but it would fit the bill.
On page 8 of Spire Global's investor presentation, it states that Spire Global has a subscription-based revenue model.
Jerome Lam profile picture
I am generally excited about space companies and could not help but pick up shares of Navsight holdings. This is a company that i’ll like to hold from the start and see it take off in the next decade. It may be the stock that puts my kids to college, who knows?

What excites me is generally the low cost of running a unique space business. Unlike SpaceX and Rocket Labs that are capital intensive companies launching satellites into space and putting humans on Mars and going through the trial and error of doing so, and thereby burning through cash piles, Spire Global is a company that simply gathers data and sell it. Plain and simple with a clear path to growth.

I was wondering if you could talk more about their business, where the growth lies in and how big are those markets are potentially. From my research, they are mostly in the business of real time weather forecasting with data that cuts across multiple industries. Where else could they expand to and what markets can they capture? Who do they compete with?
ecromer profile picture
@Jerome Lam very good questions. Are there any answers?
Cestrian Capital Research profile picture
@ecromer @jerome lam There surely are, but we don't have them. Northern Sky Research do a lot of this kind of market work - take a look. We focus on the company-specific financials, broad opportunity, and stock performance - others are much better at market analysis so we leave that to them.
Nanosats, haha. Thanks for the article. Now that the spac fervor has cooled off a bit got to be a few gems out there.
Zorgo profile picture
Great article, thanks. Any thoughts on HOL or NPA, author?
Cestrian Capital Research profile picture
@Zorgo We cover both in our subscription service.
Cestrian Capital Research profile picture
@Zorgo C'mon we gotta make a living, right?
Conviction Capital Research profile picture
you guys honestly have such great coverage of the space sector. Thanks for another good idea.
@Conviction Capital Research I agree. I have been following Cestrian for the past year since I moved to the Space Coast, and have done quite well with their recommendations. I also try to follow all local stories about relevant companies in the area, especially in Titusville and Melbourne. The area is expanding into space rather rapidly.
Cestrian Capital Research profile picture
@Conviction Capital Research Kind of you to say so! Our best work is in our subscription service - try us out here: seekingalpha.com/...
Cestrian Capital Research profile picture
@plathman2003 Happy you're happy! If you want to go deeper, try our subscription service - here - seekingalpha.com/...
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