Kansas-based Ageagle Aerial Systems (NYSEAMERICAN:UAVS) is known as an innovator in the area of agricultural drones. You literally see a tractor right on the company’s “About” page. That, in itself, could be a major growth industry. There’s another potential reason to own UAVS stock.
That reason involves an important governmental agency as well as one of the biggest companies on the planet. There’s nothing set in stone at the moment, and we don’t want anyone to jump to conclusions based on something that might or might not happen.
Still, it’s exciting to consider the possibility that Ageagle could be tapped to supply drones that would fly far beyond America’s farmlands. We can’t know for certain whether this will get past the rumor phase and become a reality. If it does, however, you’ll wish you had owned UAVS stock before the price explosion.
UAVS Stock at a Glance
Admittedly, there has been a moderate explosion in UAVS stock already. After all, the market is forward-looking and likes to buy on future potentialities.
We’ll discuss the catalyst momentarily, but first it’s worth taking note of an impressive single-day move in UAVS stock. In particular, the bulls pushed the UAVS share price up 23% on Aug. 31. The closing price on that day was $3.10.
Granted, this is a low-priced stock and is capable of making big moves. That’s actually a good thing for audacious investors as UAVS has much more room to move to the upside.
UAVS stock more than doubled from April 28 to April 29 this year. Will we see a repeat of this in September? Anything’s possible, and for the time being it looks like the bulls aren’t ready to let go of the momentum.
The Big Announcement
Anytime a small company is mentioned in the same breath as e-commerce juggernaut Amazon (NASDAQ:AMZN), sparks fly in the market. There’s no denying that Amazon’s power over the stock market is vast and far-reaching.
Here’s where it gets really interesting. If you’re hunting for the catalyst that moved UAVS stock 23% in a single day, you won’t find it on the Ageagle “News and Events” page. You might not even find it in the financial headlines, since the news stories covering the key event generally don’t mention Ageagle by name.
I’ll save you the trouble of scouring the internet for clues. The big catalyst is that the Federal Aviation Administration just gave approval to Amazon to deliver packages via drones.
Amazon considers this approval to be an “important step.” However, the company is still testing out the drones. Therefore, don’t expect to see package-delivering drones in your neighborhood next week.
Connecting the Dots
Not only is the market future-looking, but it also has a tendency to connect the dots between events. In this instance, the market is connecting Amazon delivering drones someday with the possibility of Ageagle supplying either the drones themselves, or at least the technology behind the drones.
Do a search on market-focused message boards for UAVS stock and you’ll see rampant speculation about what might happen. I don’t want to fall into that trap, so let’s keep our optimism tempered as events unfold.
Still, it’s easy to envision a future in which Ageagle facilitates Amazon’s ambitious Prime Air initiative. The e-commerce giant describes Prime Air as “a future delivery system from Amazon designed to safely get packages to customers in 30 minutes or less using unmanned aerial vehicles, also called drones.”
And it’s probably not a coincidence that Ageagle has “begun pursuing expansion opportunities within the emerging drone package delivery market with the manufacture, assembly and testing of UAVs [unmanned aerial vehicles] designed to meet specifications for drones that are meant to carry packaged goods in urban and suburban areas.”
The Takeaway
No one can say for certain whether the Ageagle-Amazon connection will come to fruition. For now, however, it’s safe to say that the bulls are in control. Like a drone in the sky, UAVS stock is flying high.
On the date of publication, Louis Navellier indirectly owns shares of AMZN. The InvestorPlace Research Staff member primarily responsible for this article does not hold (either directly or indirectly) any positions in the securities mentioned in this article.
