Today, a new race to establish dominance in space is starting, and it’s beginning to resemble a marathon. The US and Russia are being challenged by China and India, asserts Jim Powell, international investing expert and editor of Global Changes & Opportunities Report.

With some space technologies, such as robotic vehicles, Japan is also becoming a major player. In addition, the UK, France, and Germany are establishing areas of expertise in space exploration and development.

One part of the new space race that is of particular importance is its potential role in war. An Outer Space Treaty (OST) — that all the spacefaring nations have signed – bans placing weapons of mass destruction into orbit or on the moon.

Unfortunately, the OST treaty said nothing about conventional weapons. Making use of that oversight is becoming a multi-billion, and perhaps a trillion dollar effort by the four leading spacefaring nations.

The OST also prohibits a country from targeting, or otherwise interfering, with another country’s satellites. However, the US, Russia, and China – are all getting around that restriction by testing weapons against their own satellites.

The US and China also have anti-ballistic missile systems that can be used to target anything in orbit. In 2007, Beijing used a rocket to successfully destroy one of its obsolete weather satellites — an event that caused a great deal of concern in the Pentagon, and presumably in other countries.

None of the spacefaring countries can afford to fall behind in the space race. As a result, billions of dollars in contracts are being signed with companies that can supply the necessary rockets, satellites, electronics, and eventually the weapons that will be needed.

Many companies are contributing to the race to re-establish America’s dominance in space. Two that appear most attractive to me are Northrop Grumman (NOC) and Raytheon (RTN) — both of which are already profitable stocks in our portfolio.

The new space race is making the companies even more desirable — and I am recommending them once again. Both stocks are also attractively priced — and are bouncing back from recent declines.

Northrop Grumman is especially well-positioned to prosper in the space race due to its recent purchase of Orbital ATK, the world’s leading supplier of lower-cost launch vehicles and satellites. Northrop has always been a leader in large systems that have dominated the space industry since the 1960s. However, the trend is towards smaller rockets and satellites that are used in much greater numbers.

Raytheon is also in the front line for space race profits due to its vast experience with missile systems. The company produces the Tomahawk Cruise Missile, DeepStrike, Improved Interceptor, and many others. Particularly notable are a series of space-based hunter/killer satellites that are under development.

The company’s airborne guidance systems, electronic warfare systems, and other space-qualified products are also noteworthy. The US is in a wartime economy. Now another theater for conflicts has been added to those that must be mastered. Our leading space defense contractors should see rising profits for many years — and so should their investors.

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