For investors looking for highly innovative companies with asymmetric risk reward profiles – the hunt is over. Virgin Galatic Holdings (NYSE: SPCE), CRISPR Therapeutics (NASDAQ: CRSP)and Churchill Capital Corp IV (NYSE: CCIV) are three shares that have only returned between 56% and 193% in the last 12 months. The meetings are quite spectacular, considering S&P 500 returned only 16% during the same period.
Holding on to a large share in these fimscan pays off handsomely year down the line for investors who act bravely today. Let’s look today at why a commercial space travel company, a gene therapy biotechnology company and an electric vehicle (EV) manufacturer are among the most revolutionary shares to buy now.
1. Virgin Galactic
Without sales, more than $ 273 million in net losses and a market value of $ 8.7 billion, billionaire Richard Branson’s space leisure company, Virgin Galactic, could be a surprising addition to this list. The reason for its introduction is simple – ambition.
Right now, the company wants to offer spaceflights to an orbital level two to three times higher than the International Space Station’s current orbit. Wealthy individuals could enjoy breathtaking views of the entire planet in zero gravity at a hefty price of $ 250,000 per person and flight. Believe it or not, at least 1,000 people have already signed up – meaning the company already has close to $ 250 million in future revenue in the bag.
Surprisingly, space travel in leisure time has not been feasible in the past, mainly due to economic reasons rather than technical obstacles. Back in the 1970s, it would cost more than $ 18,500 to send a kilogram of payload into space. By 2019, the number had dropped to just $ 2,720.
Initially, governments would fund astronomical programs with hundreds or thousands of private contractors bidding on parts of the spacecraft itself. Therefore, each component was subject to large profit returns in addition to the massive bureaucratic resources needed to coordinate between companies, but the US government gladly took the bill. It was in everyone’s interest not to let the Soviet Union win the space race. At that time, space travel was more or less motivated by the need to stop the spread of communism, and some attention to the actual costs of the program.
Nowadays, private airlines such as Virgin Galactic build their spacecraft with their own parts and personnel, which dramatically reduces costs. I would not be surprised if commercial space travel became extensive within the next three decades. At present, the technology is still emerging, and it would be difficult to convince customers to pay half a million dollars for another spaceflight after the first. For these reasons, one can certainly buy and hold a large stake in this exploration company, but must own long-term.
2. CRISPR Therapeutics
CRISPR Therapeutics is at the forefront of treating various types of cancer and hereditary blood diseases through immune and gene therapy. Every year, approximately 360,000 children worldwide are born with either sickle cell disease (SCD) or beta-thalassemia. In the case of the former, the disease distorts the shape of the patient’s hemoglobin. This in turn can cause a life-threatening condition called a vaso-occlusive crisis (VOC), in which irregular red blood cells clot and narrow the blood vessels. Beta-lasemia can significantly reduce patients’ hemoglobin levels. Patients suffering from any of the conditions require frequent blood transfusions and hospitalization. There is no cure for the two disorders other than a bone marrow transplant.
But CRISPR Therapeutics can come to the rescue. In phase 1/2 clinical trials, patients who received it CTX001 Gene therapy transfusion saw their hemoglobin levels return to normal, were free of VOCs, and no longer dependent on transfusions. In addition, the company’s CTX110 immunotherapy succeeded in eliminating tumor activity completely in 4 of 11 patients with lymphoma. The patients all had advanced stage cancer and underwent two to five different therapies before enrolling in CTX110 studies.
Currently, pharmaceutical companies that manufacture drugs to treat SCD are valued at up to $ 3 billion, while biotechnology that successfully advances immunotherapies to market can be valued at up to $ 21 billion in valuation. Given CRISPR Therapeutic’s market value of $ 9.9 billion, the stock still has a long way to go before it can be considered overvalued. The company also has more than $ 1.69 billion in cash with just $ 348.9 million a year in losses. Given its scientific strength and its economic health, this is a biotechnology that will surely add richness to your portfolio.
3. Churchill Capital IV
Churchill Capital IV is a specialty acquisition company (SPAC) that will provide the luxury car manufacturer Lucid Motors with the general public. The transaction will be completed during the second quarter of this year.
Before that, buying shares in Churchill Capital IV will be the only way to go long on Lucid Motors. For a premium of $ 69,600, wealthy EV enthusiasts will be able to buy Lucid Motor’s signature vehicle, the Lucid Air. This car has a range of more than 500 miles, an acceleration time of 2.5 seconds to go from 0 mph to 60 mph and a charging time of 20 minutes to reach 60% battery capacity. These specifications can match or beat Tesla‘s EVs, especially when it comes to maximum range.
Lucid Air is scheduled to launch at the end of the year or the beginning of 2022. Lucid Motors has already received over 7,500 reservations for it – and it only costs $ 300 to book a car. Assuming all of its potential customers will keep their promise, the company could have over $ 650 million in revenue on the table next year.
The acquisition will also value Lucid Motors at $ 11.75 billion and provide it with $ 4.5 billion in cash. With the new capital, Lucid Motors expects to turn over $ 2.22 billion in sales next year and increase the number to a fantastic $ 22.8 billion by 2026. It hopes to make a profit in 2025.
The company can already produce 34,000 cars per year and aims to increase the number to 365,000 by opening new facilities. If you are looking for a game changer in the EV sector, Lucid Motors is a fantastic bet. It trades only for 5.3 times the 2022 revenue, much lower than the 6.8 times to 12.9 times more that its peers are priced at. Given the discount, I would not be afraid to put a good chunk of money in the stock.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We are motley! Questioning an investment dissertation – even one of our own – helps us all think critically about investments and make decisions that help us become smarter, happier and richer.