Following last week’s massive cratering in the market and fearful pandemic conditions, it’s a great time to begin buying many well-discounted stocks. And for younger investors looking to allocate some capital towards riskier plays in this asset class, Virgin Galactic Holdings (NYSE:SPCE) is looking much better-positioned for a second launch and maybe even another moonshot ride for SPCE stock.
The past five days were a vomit-inducing ride for the unprepared and maybe more so for those uninitiated investors who’ve never encountered true panic-style selling. And for good reason.
The jaw-dropping decline of more than 11% in the broad-based S&P 500 was the largest market drop since 2008 during the height of the financial crisis. At the same time, more speculative rides of late such as Virgin Galactic Holdings have really cratered comparatively.
SPCE stock is the publicly-traded vehicle for Richard Branson’s Virgin Galactic which designed SpaceShip Two. The vehicle is a suborbital spaceplane that’s inching its way ever-closer to the business of space tourism.
The Space Hype Is Real
It has been big news of late, but don’t take my word for it. Just appreciate that others are paying big bucks for the chance to take a ride. Currently there’s more than 600 advance reservations and ticket sales of $80 million. The obvious enthusiasm also helped launch shares of Virgin Galactic more than 465% since December at their recent highs.
Some on Wall Street might point at the price action in SPCE or perhaps EV giant Tesla’s (NASDAQ:TSLA) own recent move into overdrive as being as much a problem for the market as the coronavirus or COVID-19. Still, and whatever might become of today’s crippled bull market now in correction mode, for today’s generation of investors who rightfully should have a higher risk tolerance, it’s time to use events like this past week to your advantage.
SPCE Stock Daily Chart
Source: Charts by TradingView
In truth, SPCE stock is still a riskier allocation, even for millennials. The company isn’t profitable yet and that first launch with paying passengers is still to be determined. Further, Virgin Galactic’s price tag already values shares firmly as a mid-cap at nearly $5 billion.
The price of owning shares in those respects, and I’m sure other ways, is enough that many seasoned investors from older generations such as boomers or maybe my own Gen X might offer well-intentioned warnings against Virgin Galactic. Not me, though. This is no time to be that old guy.
Bottom-line, shares have corrected a dazzling and dagger-like 55%. But for today’s younger investors facing many bull and bear markets to come, as a higher-risk allocation to the portfolio, SPCE is now looking more attractive, both off and on the price chart.
And who knows, Virgin Galactic is a name that could become the next Microsoft (NASDAQ:MSFT), or more aptly, the next Delta (NYSE:DAL).
Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits