In a post-carbon world, there will be many opportunities to capitalize on new technologies that we will use to adapt to the new normal of extreme weather events.
I’ve talked about this at length in the past, focusing mostly on agriculture and water markets by seeking ways to profit from things like cultured meat, cellular agriculture, and water infrastructure. I maintain that, long term, there will be few opportunities more profitable than food and water in an environment that is no longer conducive to conventional agriculture and food production practices. This is why I like CULT Food Science (OTCBB: CULTF) and the Ecofin Global Water ESG Fund (NYSE: EBLU). I’m also doing some due diligence on a couple of other water and food tech plays for us later this year.
Another stock I’ve written about that I believe will continue to benefit from our efforts to adapt to a changing climate is Planet Labs (NYSE: PL), which designs, constructs, and launches constellations of satellites with the intent of providing high-cadence geospatial data delivered to customers through an online platform that is accessible across the globe.
Essentially, Planet Labs has been called the "Bloomberg Terminal" for Earth data.
While the company has been utilized by a number of different industries — including forestry, agriculture, finance, and insurance (as well as federal, state, and local governments) — Planet Labs is now being pursued to provide mission-critical data for a rapidly changing planet.
This includes:
- Measuring changes in global weather patterns
- Mapping utility-scale solar and wind energy installations
- Monitoring international borders
- Supporting parametric insurance to farmers for drought events
- Measuring wheat harvests in Ukraine
- Identifying environmental crimes in the rainforests of Brazil
As governments across the globe integrate new mandates that call for data-driven solutions to address climate change, Planet Labs offers the most precise geospatial data on the market. So much, in fact, that the company's technology is not only being used to monitor changes in climate and weather patterns, but it’s also being used for defense and intelligence applications. And the company just landed a 7-figure deal with a Ministry of Foreign Affairs in Asia.
Here’s what CEO Will Marshall had to say …
We are seeing strong momentum in the Asia-Pacific region from government customers focused on civil and security applications. Our global daily monitoring solution is unique in its ability to provide wide-area coverage, supporting customers with daily monitoring of entire countries at a scale that hasn’t been possible before.
To give you an example of what Planet Labs offers in terms of intelligence applications, here’s the satellite data the company provided of the Nord Stream pipeline that was sabotaged and ruptured in the Baltic Sea on September 26,2022.
And here’s a satellite image Planet Labs provided of construction work being done at a nuclear facility in Iran …
Now while Planet Labs is an excellent position to profit from the increased demand for this kind of advanced geospatial data, the stock has actually struggled a bit after the company lowered its revenue outlook back in June. Planet Labs also had to cut about 10% of its workforce earlier this month.
I really don’t expect much from the stock this year, but the company’s assets are still incredibly valuable for so many different applications, including, but not limited to: AI, defense, carbon monitoring, drought response, infrastructure, forestry and emergency management.
I’m not sure investors are currently valuing those assets appropriately, nor are they properly valuing the company’s strategic partnerships with Amazon, Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) NASA, and the UAE space agency. All of which are not trivial.
Planet Labs still has more than $300 million in cash, too, with very little debt. And despite a lowered revenue outlook, revenue growth has still been pretty impressive, along with customer acquisitions.
Now there has been talk of a potential acquisition of Planet Labs. If such a thing were to happen, any possible suitor would have to pay a premium based on where the stock is trading today. Which wouldn’t be out of the question when you consider some likely suitors would include: Lockheed Martin (NYSE: LMT), Boeing (NYSE: BO) or Amazon (NASDAQ: AMZN)
Overall, I still like Planet Labs as a long-term investment, but with the caveat that the rest of 2023 will be rough, so patience will be necessary.
