NASA vs. the Private Sector
My Favorite Travel Stock Today
A curious thing happened last week.
Dragon, a spacecraft designed and launched by Space Exploration
Technologies (known as SPACEX), docked with the International Space
Station, transferred its payload, and returned to earth safely, a
first for a private company.
A day later, Heidi Cullen, a scientist at Climate Central, had an
op-ed piece in The New York Times arguing that the U.S. needs to
put more money into its weather satellite program.
(Climate Central is a non-profit organization that was created in
2008 as a central authoritative source for climate change
Among the facts in that article were these:
About 90% of the data used by the National Weather Service come
from government-owned satellites launched in the 1960s.
The annual budget for NASA's Earth Science Division has fallen to
below $1.5 billion from about $2 billion a decade ago.
The number of actual and planned satellite missions could decline
from 23 this year to six in 2020, reducing the number of
earth-observing instruments in space from 90 now to about 20 in
Finally, in 2009 and 2011, two NASA Earth-observing satellites
costing more than $700 million failed to reach orbit and crashed
into the ocean.
The immediate blame for those failures went to Orbital Sciences (
), a company that got 71% of its revenues last year from the U.S.
government. ORB stock has lost 57% of its value since 2008.
But I pin the blame on NASA as a whole (which is going to allow
Orbital Sciences to try again--with taxpayer money--in 2013.)
Cullen thinks the solution is more money for NASA, but I suggest
it's time to get the U.S. out of the space science business. It's
time to let competitive market forces (companies like Space
Exploration Technologies) take over, to drive costs down and drive
Yes, I know the U.S. still needs satellites for military
purposes, but for weather and basic science, we should let the
private market take over and everyone will benefit.
Moving on to investing.
Last week the market bounced strongly, sparked by relief that
Spain's banks will survive and that in turn, the euro may survive
Casual observers commented that the magnitude of the market bounce
was not justified by the minor nature of the news; after all,
little has really changed.
But they fail to appreciate that the market's decline of roughly
10% prior to that bounce had set the stage nicely. And they fail to
appreciate the role of emotions in the market; the fact that so
many people were so nervous about the European situation meant
there was little selling power left, and a lot of pent-up buying
So now what?
Sentiment indicators suggest more upside is likely in the weeks and
months ahead. But until I see consistent strength--not just bounces
from oversold positions--I think some caution is still warranted.
But there are bright spots, and if you have cash to invest and you
manage your risk properly, you can take advantage of them.
Concur Technologies (CNQR
) has a great chart, indicating that growing numbers of investors
are becoming aware of the stock, learning about the company's
business and investing in it because they think the future is
If you're a user, I don't need to tell you about it.
If you're a user, you may already be an investor in the company!
But if you're not, here's what you should know.
In 19 years, Concur has grown to become the world's leading
provider of integrated travel and expense management solutions.
It has over 15,000 corporate clients with more than 15 million
individual users in more than 100 countries.
And it's still growing at a good clip, with revenues up 28% in its
fiscal second quarter.
That's all good, but last week the story got even better.
Last week, the company announced it had been selected by the U.S.
General Services Administration (GSA) to manage online travel
booking, authorizations and voucher processing for all Federal
Agencies. That's huge news, given that the GSA has about 3 million
The stock spiked higher on big volume on the news, and broke out to
a new high two days later as the broad market (thanks to Spain)
rallied to provide a supportive environment.
That means the stock moves to near the top of my watch list. If it
does well, I may write about it again.
But if you really want to be assured of continuing coverage of the
stock for as long as it remains attractive, I recommend you take a
look at Cabot Top Ten Trader, which recommended the stock a month
ago and continues to follow it.
For more, click here.
Yours in pursuit of wisdom and wealth,
Cabot Stock of the Month