SpaceX creates new era for this mid-cap ASX share

The SpaceX launch ushered in a new era of space exploration. This small-cap ASX share stands to gain from private and government programs.

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The integrated chip came about largely due to the first Apollo moon mission. The enabler of all of today's advanced technologies. The SpaceX launch on the weekend ushered in a new era of space exploration, with the US Space Force on one side and private industry squarely on the other. 

I believe one of the companies I have been watching for a while is likely to benefit greatly from any increased activity in space exploration.

A SpaceX style startup

Since 1983, Electro Optic Systems Hldg Ltd (ASX: EOS) has quietly gone about building high tech solutions to problems most of us are unaware of. It has an international presence across Australia, Singapore, the United States, the United Arab Emirates and Germany. It has also been in a strategic alliance with NASDAQ-listed defence giant Northrop Grumman.

In my opinion, the SpaceX rocket could not have docked with the international space station without Electro Optic. It is developing the technology to help with over 500,000 pieces of space debris travelling at around 30,000km per hour. This represents a serious threat to satellites, the international space station and more. 

In this area, Electro Optic has an Australian-based space situational awareness (SSA) network. This monitors and tracks orbiting space-based objects such as satellites and debris using ground-based radar and optical stations. 

That we have a company like this astounded me.

A strong defence company

As with Austal Limited (ASX: ASB), Electro Optic also provides technology and equipment to the defence markets. In this area, it develops a range of remote weapons systems for use on tactical vehicles. Electro Optic offers battle-proven technology and world-leading counter-drone technology. This has been enabled by its laser rangefinder technology. 

A well-managed company

Companies like SpaceX are massive growth engines. Amazon.com is another such example. Growth engines are massively unprofitable until the day they are. Then they are money-making factories.

Electro Optic, on the other hand, has always managed a very tight ship in my opinion. Over the past 10 years, it has grown its sales an average of 18% every year. In fact, it has managed to nearly double its sales in each of the past 3 years.

Foolish takeaway

In my opinion, the SpaceX launch and the US President announcement of Space Force, combined with heightened international tensions, are sure to increase the sales for Electro Optic in the years to come. The company has built a foundation based on excellent performance and advanced technology.

Electro Optic shares are currently trading at a price-to-earnings ratio higher than their 8-year average. However, I still believe this company deserves a place on your watchlist.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather owns shares of Austal Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Austal Limited and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Amazon. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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