It’s been a great year thus far for AgEagle Aerial Systems (NYSEARCA:UAVS) shares. Year-to-date, shares of UAVS stock are up more than 600% — including gains of nearly 200% over the past three months.
However, the question is: Can UAVS stock continue to fly higher in 2020 and beyond?
That said, let’s see what’s happening off and on the price chart of AgEagle and whether shares should be approached as a buy, sell or hold for your portfolio.
UAVS Stock at a Glance
InvestorPlace’s David Moadel recently wrote that prior to this year, AgEagle Aerial Systems was mostly known as an agricultural intelligence company with not-too-terribly exciting — and even underwhelming — price action. Nonetheless, he was being polite on both counts. This is because a full year ago, the company was simply an unknown to anyone. Well, almost — and UAVS stock was also a virtual unknown entity among investors.
To be fair, twelve months ago, AgEagle had customers using the company’s drone platform for surveying crops to optimize yields as its bread-and-butter business. Cool, right? AgEagle Aerial Systems was also closing in on a milestone ten years since being founded in 2010. Congrats! Still, though, there was little else to tell or be excited about.
By the numbers, UAVS was flying under the radar of pretty much everyone, and for good reason. The company sported revenue of less than $650,000 for the trailing twelve month period. AgEagle’s employee headcount could be counted on both hands, and it still can. However, AgEagle Aerial Systems also maintained cash in the bank that resembled a small retirement account. Shares also had a micro-capitalization of about $25 million, fetched less than 50 cents in the open market and routinely traded less than 100,000 shares daily. That said, though, the story has changed.
In 2020, UAVS has soared higher under a new CEO with solid industry experience. This was a lateral move into the growing hemp-cultivation space and business pivot into the booming retail and commercial delivery market. And, collectively, it’s all conspired to catch Wall Street’s attention in a big way.
As stated above, UAVS stock is up more than 600% YTD, and 1,200% from this time last year. Moreover, AgEagle is also trading very actively these days. In fact, on average, more than 6 million shares change hands daily. UAVS stock has also become one of notorious online brokerage Robinhood’s more popularly-held and heavily-traded stocks.
AgEagle’s story gets better, though, or more aptly. That’s what all the commotion is betting and banking on.
As part of the company’s plans for drone package delivery, AgEagle teased investors last month citing early orders from a “major e-commerce company.” Hmm, could it be the 800 lbs gorilla Amazon (NASDAQ:AMZN)? Or could the customer be brick-and-mortar giant Walmart (NYSE:WMT) or Target (NYSE:TGT) wanting last mile logistics assistance with their increasingly important online businesses?
We’ll have to wait an find out.
UAVS Stock Weekly Price Chart
If you haven’t guessed it by now, AgEagle is a potentially exciting story. However, it’s also one whose business and shares remain highly speculative. Some investors might contend AgEagle’s stock is even more iffy as it fetches roughly $150 million in valuation and trades for 34 times its total assets amid still missing devilish details.
Despite the obvious risks, I’m willing to give AgEagle the benefit of the doubt. However, that optimism is contingent on certain conditions being confirmed in the days ahead on UAVS price chart.
Technically, and if one has capital set aside for this type of riskier play, UAVS stock could be a promising buy on a rally through $3.53. That’s the four-week high in AgEagle since shares began backing and filling a massive overbought rally established in the first half of July.
The weekly consolidation pattern appears constructive as it’s allowed the stock to neutralize its overbought condition with stochastics pulling back into neutral territory and UAVS’ share price trading inside its upper Bollinger Band. The four-week low has also held a pair of 50% retracement levels tied to cycle lows from March and July.
Overall, if UAVS stock can demonstrate a modest bit of price strength while keeping its recent low of $2.55 intact, a purchase looks decent. Again, I’d stress that a buy of this caliber is only for select investment accounts. I’d also warn those investors pledge not to become unnecessarily poorer, should tomorrow’s good-looking thievery on the price chart take a turn for the worse.
The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. Investment accounts under management do not own any securities mentioned in this article.