Delivery of goods by drone could take off if the U.S. relaxes rules.
AgEagle Aerial Systems Inc.
Although the drone economy is new, it’s growing and promises to revolutionize package delivery, aerial imaging and a host of other applications in everyday life and business. “Across a broad array of sectors, many organizations are seeing the value drones can add, be that inspecting infrastructure, surveying agricultural land or aiding first responders,” says Jim Barksdale, president of Barksdale Investment & Research in Atlanta. As the industry progresses, and especially regulations begin to allow drones to fly out of sight of their operators, drones will have a much bigger impact on the economy, says Miriam McNabb, editor-in-chief of Dronelife and CEO of JobForDrones, a professional drone services marketplace. She points to “major retailers like Walmart and logistics players like UPS (increasing) their investments in the drone industry.” Here are seven drone stocks to watch today with an eye for growth.
When AgEagle was founded in 2010, its focus was on fixed-wing drones, data and analytics for the agriculture industry. Since then, it has been a story in diversification. “They’ve really moved out of a single-industry focus,” McNabb says. While the company offers two proprietary fixed-wing drones, it has expanded into contract manufacturing that also includes multirotor and hybrid fuselages for energy, construction and government, in addition to agriculture. It’s also involved in the manufacturing and assembly of drones for delivery operations. “Increasing demand for faster delivery in the transport and logistics industry is fueling capital investments in drone delivery initiatives across several sectors, including delivery of consumer packages, food, healthcare supplies and heavy cargo,” the company says.
“While the drone industry itself remains in the early innings, there are many related industries that are set to benefit from the proliferation of this technology,” Barksdale says. “Cloud computing platforms stand to benefit, as well as companies like Nvidia who supply both the hardware used in drones themselves as well as hardware used for training artificial intelligence models needed to improve the flight capabilities of drones.” Yamaha Motor Co. Ltd. (YAMHF) picked the company’s Jetson hardware for its agricultural drones, and the Chinese e-commerce giant JD.com Inc. (JD) selected Nvidia tech for its delivery drones. Intelligent Flying Machines, a warehouse analytics drone company, and Aerialtronics, which makes advanced commercial drones that can be used for power line and wind turbine inspections, have also used Nvidia hardware.
While big aerospace and defense companies such as Boeing Co. (BA), Lockheed Martin Corp. (LMT) and Northrop Grumman Corp. (NOC) all operate in the drone market, their drone businesses are just a small part of their overall sales. For a purer play, investors can turn to AeroVironment as one of the top drone stocks to watch. This relatively small defense contractor offers unmanned aircraft systems and services to the U.S. Department of Defense and international allied governments, as well as tactical missile systems and services to the U.S. government. In July, it announced two orders from the U.S. Air Force totaling nearly $16 million and an order from the U.S. Special Operations Command valued at about $22 million.
Boeing Co. (BA) Although drones are a comparatively small portion of revenue for big aerospace and defense contractors, that doesn’t mean that portion is insignificant, especially as military and civilian appetites for drones are growing. The military remains the largest market for drones, says Barksdale. Boeing’s defense division has a dedicated drone subsidiary, Insitu, which designs, develops, produces and operates unmanned aircraft systems. During the second quarter, that division conducted the first MQ-25 unmanned aerial refueling of a F/A-18 Super Hornet. In addition to defense applications, the company’s technologies can be applied to commercial uses such as environmental monitoring, agriculture, search and rescue, disaster relief, and mining operations.
EHang Holdings Ltd. (EH) Think of passenger drones like pilotless aerial taxis. Beyond city transportation, they have applications for tourism, logistics and emergency response. In February 2018, EHang released the first video of a passenger flight in one of its drones. This year, the company has completed trial flights in China and Japan and started operations at a production facility in China. During the second quarter, “we made meaningful progresses toward the certification process and trial operations for our existing AAV (autonomous aerial vehicle) products such as the EHang 216 and the EHang 216F, and further made our product and solution portfolio well-rounded for urban air mobility,” CEO Huazhi Hu said in remarks accompanying the company’s quarterly financial report.
Parrot SA (PAOTF) In August, this French drone-maker announced a partnership with Verizon Communications Inc. (VZ) for the first out-of-the-box 4G LTE-connected drone in the U.S. The 4G data link between drone and operator “is a game changer for flight beyond visual line of sight, as the drone can stay connected even when it flies behind a building or other obstacle,” according to Dronelife. The company’s Anafi USA drone — built for first responders, firefighters, search and rescue teams, security agencies, and surveying and inspection professionals — is manufactured in the U.S. and has the same security, durability and imaging capabilities as a drone the company designed for the U.S. Army. That may be an advantage for Parrot in securing U.S. government contracts given the tensions between Beijing and Washington, especially in the realm of technology.
Plymouth Rock Technologies Inc. (PLRTF) Plymouth Rock Technologies could also benefit from a made-in-the-USA strategy. The company expects that its X1 multirotor unmanned aircraft system, or UAS, will enhance the capabilities and efficiency of law enforcement, intelligence agencies, military and rescue services. Meanwhile, it expects its vertical takeoff and landing fixed-wing UAS platform to enable extreme long-range surveillance for border security, military, search and rescue, and naval operations. In June, Plymouth Rock announced that the first X1-H model was delivered to the Kazakhstan-based drone service company Aardvark to perform long-range oil pipeline security and environmental operations in remote locations. In July, Plymouth Rock said it secured a contract for unmanned aircraft systems with the Durrell Wildlife Conservation Trust for environmental operations in Madagascar. Still, the company is very small, and investing in Plymouth Rock could be risky.
Best drone stocks to watch: — AgEagle Aerial Systems Inc. (UAVS)
- As Technology Increases, Here Are 7 Drone Actions To Watch
- Check all news and articles from the latest Security news updates.