Sunday, March 15, 2015

Drone Stocks May Fly High

With the recent news about the guy who was flying the drone around the White House, investors attention has shifted to the companies in the drone business, including commercial, industrial, military, government, security, and recreational drones.

If you want your own drone, some are very reasonably priced. You can get a small Cheerson CX-10 Mini 29mm 4CH 2.4GHz Quadcopter for less that $20. If you want a drone with a camera, you can get the UDI U818A 2.4GHz 4 CH 6 Axis Gyro RC Quadcopter for less than $60. Of course, if you want one of the top of the line drones, you could get the Az 4K UHD camera drone for the price of about $8,500.
One of the top pure play drone companies is AeroVironment (AVAV), founded in 1971. It is the top seller of small drones to the U. S. Government. Its drones includes the Raven, the Wasp, and the Puma. AeroVironment is also offers electric vehicle charging systems and services. The stock trades at 152 times trailing earnings and 73 times forward earnings. It is debt free with $8.89 in cash per share.

AeroVironment has a strategic partnership with Lockheed Martin (LMT), which is also involved in the production of drones, which includes the Stalker. Drones are just a small portion of Lockheed's business. The company trades at 18 times training earnings and has a forward price to earnings ratio of 16. The stock sports a yield of 3.0%.

Other companies involved in the drone business include Elbit Systems (ESLT), which makes the Hermes and Skylark families of UAVs, and Boeing (BA) which manufactures the hydrogen-powered Phantom Eye drone.

For a list of the publicly traded drone stocks, which includes information on the PE ratio, the forward PE ratio, and the connection to the drone business, go to I hope that some of these stocks will make your portfolio fly high.

Disclosure: Author didn't own any of the above at the time the article was written.


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