Do companies that make cool stuff make for hot investments?

This week's issue of Popular Science suggests four firms in the defense and aerospace sphere that just might. Perusing this week's edition reveals a whole raft of "cool stuff" under the rubric: "Best of What's New 2008":

  • There's the ground-based telescope, 10 times as powerful as the Hubble Space Telescope, for example.
  • The Japanese communications satellite that will deliver wireless Internet access to earthbound Asian Web surfers at a mind-boggling speed of 1.2 gigabytes per second.
  • And of course, the personal flying jetpack for $100,000.

The companies developing these bleeding-edge devices aren't being traded on the market yet, but four of the other 11 products making the PopSci cut are manufactured by public companies. Here's a quick rundown of who they are, and what they do:

  1. Lockheed Martin (NYSE:LMT) won prime billing as the "Grand Award" winner in "Aviation & Space," thanks to its role in building the Phoenix Mars Lander (which ceased functioning last Monday). Lockheed's P/E: 9. Five-year expected growth rate: 11%.
  2. Aerospace giant Northrop Grumman (NYSE:NOC) gets kudos for its foresight in buying Scaled Composites last year. SC, as you probably know, builds both suborbital vehicles and the planes that will launch them for Richard Branson's Virgin Galactic. It was one of these planes, the WhiteKnightTwo, that became first runner-up to Lockheed in PopSci bragging rights. Northrop's P/E: 8. Five-year expected growth rate: 13%.
  3. Fourth place in the magazine's rankings (but first in the hearts of Motley Fool Rule Breakers members) went to GeoEye (NASDAQ:GEOY) and its self-titled GeoEye-1 imaging satellite (manufactured for GeoEye by General Dynamics (NYSE:GD)). According to PopSci, the Dash-1's vision is: "twice as sharp as current satellites," a fact that will win its images a place on Google (NASDAQ:GOOG) Maps next year. GeoEye's P/E: 9.4. Five-year expected growth rate: 20%.
  4. Finally -- and to Star Wars fans a grave injustice, at ninth place in the rankings comes Boeing's (NYSE:BA) 18-ton flying laser gun (co-developed with Lockheed, Northrop, and Raytheon (NYSE:RTN). Boeing's P/E: 8. Five-year expected growth rate: 11%.

Foolish takeaway
Each of these four scientific fan-faves is breaking rules, making headlines, and basking in the limelight. What's more, not a one of 'em trades for a PEG of more than 1.0. You can thank Mr. Market's hysteria for the bargains ... and Popular Science for the ideas.

(Just make sure to use the magazine's recommendations as a starting point for further research, and the PEG ratios as your first clue that digging further may be worthwhile. Then, do some due diligence of your own.)

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.