This Red-Hot Sector Is Dialed In to Huge Growth

Andy Snyder|October 20, 2022

Elon Musk has shown the world the power (and profit potential) of satellite-based internet.

His actions are highlighting a tremendous investment opportunity… one that our Manward Letter subscribers know very well.

As the headlines have reported in recent days, Musk’s Starlink system has been linking Ukraine’s soldiers to the web. With key infrastructure cut off by the enemy, his system of low earth orbit satellites has been providing crucial data to the front lines.

Last week, Musk threatened to cut it all off. He can’t afford to keep paying for it without government support, he said (especially after his bungled Twitter deal).

It was an empty threat… more of a war of words between him and a few world leaders. But it shows the power and opportunity in the satellite sector.

The Missing Link

In the most recent issue of Manward Letter, we detailed the investment potential of a leader in the emerging direct-to-cell space. It just signed a major deal with Apple (AAPL) to provide satellite connections for iPhones. There’s no need for land-based antennas… or the companies that operate them.

But focusing on just Apple or any of the other big carriers does the breadth and velocity of this industry little justice. Digging deeper, we can see just how fast things are moving and how widespread the opportunities are.

There is some big news out there.

For instance, privately owned Lynk Global just won the first-ever direct-to-cell operating license. This is interesting. It’s huge, really.

It means the company has the FCC’s blessing to run a network that doesn’t rely on cell towers or any other terrestrial infrastructure.

Lynk sends its signal right to a user’s phone… cutting out the middlemen in between… including one of the big-name cellular providers that likes to rip into our wallets each month.

That’s big. It’s exactly what we’ve been looking for.

Lynk is competing with the industry’s big dogs for the lead in this race. Its ideal path forward surely involves an acquisition. After all, it has the licenses… but nowhere near the satellites or technology to bring its vision to fruition.

Many say the tech sector is in for a long-term downswing. It’s something we just talked about with the world’s top tech analyst, who’s also Manward’s newest contributor. Manward Letter subscribers got access to our conversation with Mark Mahaney yesterday.

Indeed, there may be trouble for the big dogs. The puppies are growing quickly and learning some fancy new tricks.

Now Hiring

Several years ago, we wrote about what we call the “Glassdoor indicator.” By looking at what sorts of jobs a company is hiring for, we can get a good sense of its health and its future plans.

Sometimes this data is more useful than what you’ll find in an income statement.

That’s the case here. Lynk has no less than a dozen open positions right now. That’s a lot for a tiny company. It’s looking for electrical engineers… spacecraft engineers… satellite engineers… and even a launch manager.

Clearly, it has big plans… and big funding.

This gives us a glimpse into the future of this space. It shows where some of the key players intend to push their businesses.

While we can’t invest in Lynk (again, it’s privately owned), it shows just how growth-focused the budding satellite industry has become. While most of the tech sector is shrinking (quickly!), this niche within the sector is not just growing but finding ample capital to get the job done.

That’s hugely important.

The CEO of the company we just added to our Manward Letter model portfolio says the new deal with Apple could increase his company’s subscriber base by 50 times.

“This growth is going to happen quickly,” he said.

What’s perhaps most interesting is the compounding nature of all of this.

It’s incredibly disruptive. For the tech industry’s status quo… all of this is very dangerous.

For investors, it spells opportunity.

It’s not just what Musk does… or what Lynk does.

The more players working in this space, the better. Yes, they are competitors, but at this stage of things, nearly all competition is mutually beneficial. The quicker the licenses are issued and consumers start using the technology, the faster the growth will be.

AT&T (T) is in on the race. It says its cell technology is 18 months ahead of Musk’s. It’s still waiting on a nod from the FCC. Jeff Bezos and Verizon (VZ) are in on it too.

We’re excited about it.

There are big things happening

Direct-to-cell satellite communications are here. And we’ve got our sights on the winners.

We’ll have more on this sector as it quickly unfolds…