If you’re fascinated by drone technology — or at least believe it has a future — check out this company. Agricultural technological solutions provider AgEagle Aerial Systems (NYSEAMERICAN:UAVS) is a drone industry pioneer. All told, UAVS stock is an easy entry point into this niche market.
So, how could anyone possibly object to a proud, made-in-America drone manufacturer like this name? It’s hard to imagine, but one particular research firm recently issued a scathing review of AgEagle.
That report seems to have been a contributing factor to the recent decline of UAVS stock. But is that a red flag? Or is it a prime buying opportunity?
That’s the billion-dollar question. For this article, we’ll try to get to the bottom of the allegations surrounding this company, as well as highlight this stock’s future prospects.
UAVS Stock at a Glance
Much like a drone itself, UAVS stock has flown high and far over the past year. Considering that the share price was around 34 cents a year ago, it’s amazing that shares now change hands at almost $8.
In fact, we’ll probably never see that penny-stock price again. The stock ran up to $6 by the end of 2020. And that wasn’t even the end of its journey into the clouds.
On Feb. 10, UAVS stock touched an astounding 52-week high of $17.68. Things then continued to go quite well for the bulls until a negative report about the company was issued on Feb. 18.
It’s surely no coincidence that the share price plunged below $9 that day. As of midday Mar. 22, the stock is priced at $7.73.
But now, it at least appears that the worst part of the drawdown is in the rearview mirror. Next, re-capturing $12 and then $15 will be crucial as the bulls work to minimize the damage and eventually target new 52-week highs.
Last year, I reported on AgEagle’s leadership position as a designer and manufacturer of unmanned aerial vehicles (UAVs, hence the ticker), otherwise known as drones.
In defense of that position, I pointed out that, according to the company’s released fiscal results, the company’s revenues increased by 516% during the six months ending on June 30, 2020, compared to the same six-month period of 2019.
Since that time, nothing has really changed concerning AgEagle’s drive to execute on its business strategy and innovate in the field of drone technology. However, evidently not everyone sees the drone maker in a positive light. In February, analysts from Bonitas Research claimed that UAVS stock was just “a pump & dump scheme.”
The authors of the Bonitas report admitted that they have a short position on the stock. But they also argued that the AgEagle share price increased due to rumors of the company potentially securing an important e-commerce client.
“We have found no evidence of any ‘major e-commerce customer’ or any drone technology credited to AgEagle other than reference to the Promo Video leaked by AgEagle’s founder and former Chairman Bret Chilcott’s daughter,” asserted Bonitas.
A Swift Rebuttal
Those quotes from Bonitas were from Feb. 18. Just a day later, AgEagle issued an emphatic rebuttal.
The company asserted that it “is contractually obligated not to disclose the name of its major ecommerce client due to adherence to the terms and conditions of a non-disclosure agreement between the client and AgEagle.”
If that is indeed the case, then AgEagle cannot be faulted for neither confirming nor denying the details regarding a potential deal with a significant e-commerce client.
Furthermore, though, AgEagle CEO J. Michael Drozd showed that he’s not afraid to strike back at the short sellers.
“The report by Bonitas Research contains multiple baseless claims, which we refute in the strongest possible terms. It is a clear attempt to manipulate and profit from the Company’s resulting stock price decline.”
Given the fact that Bonitas admits to its short position on UAVS stock, it would of course be more difficult for the firm to be fully objective in its assessment of AgEagle and stock.
Bonitas’ allegations may or may not have merit. Still, it’s hard to blame AgEagle for withholding information if there’s a non-disclosure agreement.
More importantly, though, it has become clear that the drone age is upon us. What’s more, AgEagle has already done well in terms of revenue generation. Therefore, there’s no need to panic-sell your shares of UAVS stock if you own them.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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