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Seraphim Space Investment Trust - Derating offers an attractive entry point

So far in 2022 long-duration growth stocks have seen a significant de-rating due to a variety of reasons such as the war in Ukraine, supply chain issues and monetary contraction as interest rates have risen to counter soaring inflation. Seraphim Space Investment Trust’s (SSIT’s) share price has been hard hit given the relatively early-stage growth companies into which it invests. However, the long-term secular drivers of demand for the industries that space technology enables, such as defence and climate change mitigation, have, if anything, come into sharper focus in 2022 with the war in Ukraine and notable climate events such as flooding and prolonged heat waves. It is also important to separate the current market sentiment towards such companies and their operational performance and balance sheet strength. Average revenues across the top 10 portfolio positions (which accounted for 91% of the 31 March 2022 NAV) grew at 58% y-o-y to June 2022, while bookings increased by 77% over the same period. In addition, the majority of SSIT’s portfolio is fully funded through June 2023, mitigating the need to raise additional finance in less favourable capital markets.