Drones are a growing business that benefit multiple sectors. These include anything from media creation, delivery, to defense. As the technology matures, drones can carry heavier weights and fly further.
Here are the top companies working on drone technology:
🛫 Industrial Aerospace
Drone Delivery Canada Corp (FLT-X)
A drone delivery company that is conducting trials in Northern Ontario, delivering packages that are less than 10 pounds. They are expanding into the US, and are also testing drones which can carry up to 2500 pounds for long distances. The technology can be used for packages, mail, medical supply, or any kind of delivery need.
He doesn't follow this closely, because it's a pre-revenue company that isn't generating positive cash flow yet, so it's too early for him to consider. It's in the drone delivery space, an interesting space. The big problem is that he doesn't know the future of drone delivery or if this company can execute. He would…
They recently completes a first test flight for their electric vertical takeoff and landing (EVTOL) aircraft. They developed the concept through their subsidiary Aurora Flight Sciences, which is also a partner with Uber for their flying taxi project. Their craft is looking very promising as the prototype completed a controlled takeoff and hover before landing.
If Biden wins He can see China making a huge purchase of Boeing planes. If so, Boeing shares would roar (also would roar if it gets approval for the 737 Max).
Elbit Systems (ESLT-Q)
An Israel-based international defense electronics company that produces Unmanned Air Vehicle (UAV) Systems. These crafts are used by armed forces and governments, including a recent contract with the Brazilian Air Force and by the Swiss Federal Department of Defense for its new reconnaissance drone program.
(A Top Pick Aug 02/19, Down 13%) They make defence electronics and a strong performer since their last acquisition. He's holding this long term. A headwind is the market moving towards cyclical businesses instead of defence stocks. But ESLT still has strong long-term prospects.
HEICO CORP (HEI-N)
They produce subcomponents used in commercial and defense satellites, aircraft, Unmanned Aerial Systems (“UASs”) and launch vehicles. Their components were used in NASA’s Curiosity.
They make OEM for commercial airlines, and electronic components for airlines, the military and NASA. Half the business is doing okay while the other is cocooning. They hit a high a year ago, and has come down after a stock split. The smallcap manufacturers are under the gun in recent years from weakening demand and…
L-3 Communications Holdings (LLL-N)
In the defense field. Their Drone Guardian C-UAS system provides a flexible and scalable system against threats. Their communications devices are often used in other companies drones, since it is a military standard issue.
Great company and has done very well but a good entry point would be a lot lower than where it is now. Trading at about 45X this year's earnings and 35X next year's. Hitting on all cylinders but they better be to maintain those multiples. Any diversion from their growth rate will mean big damage…
Northrop Grumman (NOC-N)
An American global aerospace and defense technology company that produces unmanned (UAV) surveillance aircraft. They are a recognized leader in Autonomous Systems. They are a big supplier for the US military and are now opened up to sell to the EU and Japan.
Stockchase Research Editor: Michael O'Reilly NOC is a security company providing products like autonomous systems and cybersecurity and it operates in the US, Asia-Pacific and internationally. It has over $70 billion in backlog orders, which are principally with government agencies like the US Defense department. Recent earnings were up 19% with a 53% increase in…
A major U.S. defense contractor that manufactures weapons, and military and commercial electronics. 25% of its revenues come from cybersecurity, a hugely growing area. They also provide the army with drones for thwarting other unmanned systems.
A big option is expiring soon. Option: not good. RTX is under pressure, because China will punish any company supplying defence to Taiwan. But he expects them to gave a good quarter.
Textron Inc (TXT-N)
Textron Systems’ high-performance unmanned systems are used by both military and commercial enterprises. Part of their business is Bell Helicopter, Cessna Aircraft. They are one of the leading providers of business jets and armoured vehicles for the military.
Doesn't cover this closely, but they are a big business jet manufacturer. There has been an oversupply in that industry. Going forward, as corporate profits improve, you usually see affirming in business jet orders. They also have a defence operation as well. She wouldn't be inclined to buy at these prices.
Harris Corp. (HRS-N)
They provide and integrate small UAS in the National Airspace System (NAS)
Most famous for military radios, but also has diversified into a number of unrelated businesses, including “ship to shore” communication offshore oil rigs. There may be a management change coming. He doesn’t like their diversification away from the military business. Although he likes military electronics, there are much easier ways to do it using much…