One Guy's Investments: Annual Checkup -- SPDV

I have been invested in SpaceDev (SPDV -- free RT quote) since early last year, with an average purchase price of about $1.70 -- you'll notice that's a fair cry from the $1.50 it's been peaking at this week, and my holdings have been underwater for most of the time I've owned them. I'm still confident in the long-term future of SpaceDev, however, and though it's always a worry when a very lean and successfully managed company acquires a larger, unprofitable one as is the case with SpaceDev's purchase of Starsys, I bought more on the merger news and I think they're going to make it work. I like the fact that the Starsys acquisition is going to quickly grow the company to the point that they're ready to be relisted on one of the major exchanges, which might be a near-term catalyst, but more importantly I like that they're bringing in another company with great complementary capabilities and a history of excellent execution in government contracts. SPDV's biggest income stream right now is from a continuing huge contract for missile defense microsatellites, but they also have recently offered their first real commercial product -- they'll design a microsatellite for you and launch it at a much lower price, and they have plenty more smaller irons in the fire with, among other things, a compelling proposal for a space shuttle replacement. I jumped on doing my checkup of SPDV today because I read a Motley Fool article that I liked a lot this morning, and you can go to that for some more detail and more caution about the merger risk and their reliance on government contracts, but I personally remain very optimistic about SpaceDev's future. I probably should wait to see how they execute post-merger and get a handle on the impact of dilution (though it will be accretive to sales, if not earnings) before buying more, but I must admit I'll be tempted to add more early this year if the price remains low.

Labels: SPDV