A Sock-Drawer Trend-Long Play

I gave CLUB/EDGE clients this stock pick last month on expectation this could be 10X within the next two years - even if US goes into recession!

A Recession & Maybe Even Musk-Proof Stock

AST SpaceMobile is not my usual trend long - where I focus on break-out stocks for my LaDucTrading.com trend-long-only portfolio. ASTS is a young US tech company competing with fast-growing Starlink, the Elon Musk company. Some may think this is a bad idea: "pre-revenue stage" start-up... tech long into potential recession & trade wars ... not to mention it's up against the wealthiest man in the world who sits at the right-hand of Trump.

On the other hand... ASTS has landed clients, contracts & investments of size, based on its ability to deliver satellite-based broadband to mobile devices - and video calls! AT&T, Verizon & Vodafone have invested in ASTS & announced contracts - which opens the door for other carriers, globally, to expand coverage to rural areas, include coverage without roaming on other carrier networks, and ensure service during disasters when cellular is down. Think: no dead zones!

Japan's 4th largest mobile carrier, Rakuten Mobile, added ASTS stating they can deploy ASTS with almost no additional investment or costs. Chili's largest telecom company, Entel, is saving $30B in Capex by partnering with ASTS.

ASTS enjoys 90% margins with a growing addressable market - not just the 15 million users out of cell tower reach, but the 150M users willing to upgrade for 24x7 connectivity even during disasters. Not to mention mobile providers looking for additional revenue sources.

ASTS is well positioned to secure government funding for public safety:

AST SpaceMobile will light up FirstNet's premium lowband 700mhz spectrum to deliver full broadband connectivity to first responders and victims

It no doublt helps that America's first responders' largest network for public safety - "FirstNet®, Built with AT&T" - will more likely expand disaster coverage using ASTS over Starlink, given AT&T is also an investor (6.3 million shares).

Analyst Coverage

Currently, 6 Wall Street analysts cover AST SpaceMobile (ASTS) stock.

• Consensus: The Wall Street consensus is a "buy".

• Ratings: 6 analysts have rated ASTS as bullish, with 0 rating it bearish or neutral.

• Analyst Firms: Some of the firms covering ASTS include UBS, Scotiabank, Cantor Fitzgerald, and Deutsche Bank.

ScotiaBank in particular gives it a conservative $40 price target, publishing a bullish analyst report Feb 10th when we were chasing ASTS long > 25.18 on that gap up from my live trading room ;-)

ASTS - Some Updates

March 8th, I posted some updates for CLUB/EDGE clients in their Slack workspace under #Trends as signal for my continued confidence in the company:

Q4 2024 Earnings Summary

And from recent 10-K ;-)

AST entered into a services agreement with Google GOOG on October 16, 2024 for 3 years after continuous commercial coverage for end users at certain satellite orbit inclinations.

And speaking of stealth news and matters for ASTS growth prospective for Latin America, I found from Feb 21st:

AST SpaceMobile's Abel Avellan Appointed Commissioner to the ITU/UNESCO Broadband Commission

Just yesterday:

Carlos Slim cuts ties with Elon Musk’s Starlink, invests $22 billion in independent network.

Curious:

Carlos Slim and Abel Avellan (CEO of ASTS) are co-chair and commissioner to the ITU/UNESCO Broadband Commission for Sustainable Development.

Patience

This is not my usual Trend Long - where I WAIT for the all-time-highs to get taken out, a backtest to hold, and then breakout back above ATH, which was $39 back in August 2024, before getting cut in half down to its 50W EMA at $18 where it not only bounced at its ascending 200D EMA, but also had LARGE call option positioning before it moved quickly back up to $33.55 last week.

This is the kind of technology play that could 10X here in time from $30 to $300 given the potential roll-out to larger US coverage and 90% margins, so I'm interested in playing via leaps.

For those more aggressive, selling $20P and buying $50C (or last strike) for nearly scratch out in JAN '26 or even JAN '27 is interesting - as long as you have the margin and know how to defend. I also like a financed call spread like JAN16 '26 30X50CS against sold $20P for nearly scratch.

My point: as long as $20 monthly support holds - with digestion in this $25 area next few weeks/months - this could be a nice mover higher next 2 yrs despite recession risk pulled forward.