Updated: Nov 1, 2021
The other day my daughter and I took our dog Lucy for a walk in the nearby park. Suddenly my dog went crazy; she was barking her junkyard dog bark, and the hair on the back of her neck stood straight up. Truthfully, Lucy wouldn't hurt a fly and is a terrible watchdog. But she was surprisingly worked up and shockingly vicious-looking - I had no idea her teeth were so sharp!
That's when I heard the buzzing and thought, what could it possibly be? And then I looked up. A DRONE! I was looking at eye level and missed it! Now, this wasn't a scene out of The Terminator, or an Amazon (Ticker: AMZN) testing deliveries, just a dad and his son practicing flying a drone. I'll admit, I was shaking in my boots a little bit as I heard the voice of Sarah Connors whisper, "The future has not been written."
When my dog and I finally settled down, the friendly dad showed us his cool device, which even broadcasted video! We found ourselves on camera - double cool. Despite my initial shudder, as we continued our walk, my mind started racing - of course.
It's time for Jessica Perrone to go down her Rabbit Hole...
If you've spent some time watching sports in the last few years, you already know many sporting events enhance broadcasts with drones. Real-estate properties have gorgeous aerial photos and videos by drones. Some countries even use unmanned aircraft for security and defense.
But the potential applications for delivery of retail products are mind-blowing! Can you imagine "droning" Amazon (PrimeAir) (Ticker: AMZN) orders or DoorDash (Ticker: DASH) deliveries? According to Bloomberg, "Drones could account for 30% of same-day package deliveries by 2040." Wow!
Drone deliveries could also be an avenue for UPS (Ticker: UPS), FEDEX (Ticker: FDX), and even the US postal service to venture down! This past spring, UPS announced they plan to purchase electric Vertical Takeoff and Landing (eVTOL) aircraft from BETA Technologies. EVTOLs would expand their air service to small and mid-size markets. "[EVTOL] aircraft will take off and land on property at UPS facilities in a whisper-quiet fashion, reducing time-in-transit, vehicle emissions, and operating cost," says the announcement. This type of automation could also potentially be a huge asset during the current worker shortage!
With that context in mind, it is evident that drone companies are rapidly becoming the next up-and-coming industry to watch. Yahoo News recently published an article listing the 10 best drone stocks to invest in. They highlight drone manufacturing companies or manufacturing support companies, such as Alphabet Inc (Ticker: GOOGL), The Boeing Company (Ticker: BA), NVIDIA Corporation (Ticker: NVDA), and Amazon.com, Inc. (Ticker: AMZN).
US News and World Report also published an article last year with some fascinating mentions. They point to AeroVironment and EHang Holdings as two attractive drone stocks to check out. Tim Bain, president of Spark Asset Management Group, mentions AeroVironment (Ticker: AVAV) as a top drone stock to watch in the article. While the company offers drones for commercial use, it derives most of its revenue from unmanned aircraft and services related to the US Department of Defense. Bain says, "AeroVironment is essentially a play of the growth of the military drone market."
US News and World Report also names EHang Holdings (Ticker: EH) as another stock to watch in this space. Think passenger drones or pilotless aerial taxis. Beyond city transportation, these unmanned aerial vehicles could also have applications for tourism or emergency response.
Looking for a way to simplify and just have an overall drone solution? According to ETF trends, "[the] drones are coming". For investors considering positions in the ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ), that's quite a positive development.
Companies within ARK Autonomous Technology & Robotics ETF* (ARKQ) typically fall into the following categories:
👉Robotics and Automation
So if you are interested in these spaces, this may be a solution for you to investigate further.
These are just a few ideas I put together inspired by my recent run-in with a drone. As a reminder, I always encourage you to research this stuff on your own. Just because I mention specific securities doesn't mean there aren't other fantastic options out there that you could stumble upon yourself! Some of the stocks in my newsletters could be trading at recent or all-time highs, which is a great time to just bookmark those stocks, get to know them, and wait for an opportunity to get involved!
And remember, for more class information, visit our website herfiniq.com, or join the discussion, on the @herfiniq Facebook page.
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Disclaimer: Jessica Perrone is not a registered investment professional nor a financial advisor. This content is for educational purposes only and is not investment, tax, or financial advice. Always do your own research. You are solely responsible for all investment, tax, and financial decisions that you make. Please read the full disclaimer here.