Redwire Corp. had a slow start after going public in 2021 but prospects for the Jacksonville-based space technology company are brightening, particularly with the election of Donald Trump as president.
Redwire’s stock jumped 75% from Election Day through the end of November, with investors hoping for big increases in revenue.
“Like other industries, space-related stocks have rallied since President Trump won the election,” Alliance Global Partners analyst Brian Kinstlinger said in a Nov. 25 research note.
“While SpaceX, given Elon Musk’s close relationship with President Trump, will likely be a primary beneficiary, we expect there will be many other winners,” he said.
“Growth in space-related budget for defense and for NASA was much stronger under President Trump.”
Beyond the benefits from the new administration, analysts said Redwire was already poised for growth from new contract awards.
H.C. Wainwright analyst Scott Buck initiated coverage of Redwire Nov. 26 with a “buy” rating.
“With decades of space heritage, the company, in our view, is positioned to be a long-term winner as expansion into space accelerates over the coming years driven by exploration, communications, and national defense,” Buck said in his report.
“As the company begins announcing larger space contracts, potentially as early as 2025, operating leverage should improve pushing the business towards positive EPS and free cash flow and driving new investor interest,” he said.
Redwire is not only counting on increased spending by the U.S. government. The company announced Dec. 2 it opened a regional office in Warsaw, Poland, to expand its European operations.
The company also has European offices in Luxembourg and Belgium, according to its annual report.
The addition of the Warsaw office gives it 17 facilities in the U.S. and Europe employing about 700 people, it said.
Redwire was formed in 2020 by merging seven space technology firms, including Jacksonville-based Made in Space.
It went public in 2021 by merging with a special purpose acquisition company called Genesis Park Acquisition Corp. and gave lofty projections of revenue growth.
The stock traded at a high of $12.96 on its first day after completing the merger in September 2021 and reached a high of $16.98 the next month.
However, the stock plunged in November 2021 after Redwire had to postpone its first quarterly earnings release because of an accounting issue.
With the company never reaching the revenue projections it made before going public, the stock never really rebounded and opened 2024 at $2.90.
Redwire’s stock had been recovering this year before the election, closing at $8 on Nov. 5. But the stock surged after Election Day, reaching a high of $15.25 on Dec. 2.
Redwire reported third-quarter results the day after the election, saying revenue rose 10% to $68.6 million.
It also said it identified $6.9 billion in revenue opportunities, including $2.9 billion in bids submitted.
“Bids submitted have historically been a leading indicator of future revenue supporting our 18.1% revenue growth forecast for 2025,” Buck said.
Bid opportunities are only expected to grow under the Trump administration.
“As more federal and commercial dollars move towards space technology, we expect Redwire to be a significant beneficiary,” Buck said.
“While some upside may already be priced into Redwire shares, given the 72.1% appreciation (as of Nov. 26) since election day, versus just an 8.0% increase in the Russell 2000, we recognize the new administration has yet to even take office suggesting a favorable tailwind for the industry could last the entire four years of the administration,” he said.
Buck set an $18 price target for the stock.
Kinstlinger, who maintained his “buy” rating, raised his price target from $10 to $16.
“The increase reflects both large contract wins we expect based on its proposals submitted and strengthening investor enthusiasm for the few higher-quality space-related stocks,” he said.
Forbes sees support for cannabis stocks from administration
While Redwire has produced the best post-election returns by far among Jacksonville-based companies, LFTD Partners Inc. has been the worst performer.
LFTD produces and sells hemp and other cannabis-related products, and the industry has suffered from the defeat of legal marijuana initiatives in Florida and other states.
However, Forbes magazine said in its daily emailed newsletter Dec. 2 that the cannabis industry is optimistic about support at the federal level.
“Since leaving office, Trump’s stance on weed has evolved, voicing support on the campaign trail for rescheduling, passing banking reform and reiterating his belief in a states’ rights approach to legalization,” it said.
LFTD’s low-priced stock dropped 10 cents to 50 cents between Nov. 5 and Nov. 29, a 17% decline.
Rayonier Inc. said Dec. 2 its board of directors declared a one-time special dividend of $1.80 a share, after selling off some of its timberland for $495 million.
The timber and real estate company based in Wildlight, in Nassau County, said the dividend will be paid out as a combination of cash and stock.
“The substantial progress we made on our disposition plan this year is allowing us to return cash to our shareholders while also providing us with considerable capital allocation capacity to act opportunistically to enhance long-term shareholder value going forward,” CEO Mark McHugh said in a news release.
“By using both cash and shares to comply with our REIT taxable income distribution requirements, we will retain significant flexibility to further reduce leverage, execute on share repurchases, or fund other future capital allocation priorities.”
Shareholders will be given a choice to receive the dividend all in cash or all in common stock, but the amount of cash paid by Rayonier will not exceed 25% of the total.
If more than 25% of shares are elected to take cash, the cash portion will be prorated among the stockholders who requested it.
Rayonier has been paying regular quarterly dividends of 28.5 cents per share.
The special dividend follows the sale announced in November of about 91,000 acres of timber in Southeast Oklahoma and 109,000 in Northwest Washington in four separate transactions.
Rayonier owned or leased 2.7 million acres of timberland in the U.S. and New Zealand as of Sept. 30.
Tiptree Inc., parent company of The Fortegra Group, declared a special cash dividend of 25 cents a share Dec. 2.
The payment is in addition to its regular quarterly dividend of 6 cents a share.
Greenwich, Connecticut-based Tiptree is an investment company and Fortegra, a Jacksonville-based specialty insurance company, is its major holding.
Tiptree did not give a reason for the special dividend but Fortegra has provided the company with a big increase in earnings this year.
Fortegra’s pretax earnings jumped 58% in the first nine months of this year to $135.3 million.
Tiptree’s total pretax net earnings, which includes corporate expenses, were $107.1 million.
With the big contribution from Fortegra, Tiptree’s adjusted net income in the first nine months of this year grew 52% to $72.8 million.
Tiptree called off a planned initial public offering for Fortegra in February, the second time it canceled an IPO for the business since acquiring Fortegra in 2014.
It also canceled an IPO in April 2021.