The world of technology has disrupted every aspect of our lives. Not many people know that drones go back more than 100 years, even though they have only recently started to gain public attention. Many companies use drones to carry out different services or boost productivity, while many other individuals buy drones for recreational activities. The following sections round up the best drone penny stocks and why they are worth your attention!
What Is A Penny Stock?
The term “penny stock” refers to a small company that trades at $5 or less per share. The definition initially included shares less than $1, but the US Securities and Exchange Commission (SEC) expanded the term. Penny stocks often lack liquidity. They do not trade frequently; in other words, investors who buy penny stocks might find it challenging to sell the shares because there might be no buyers available at the time.
Penny stocks are considered very risky because of this lack of liquidity. The share prices are usually very volatile, so that investors could lose some or all of their investment. At the same time, investors choose penny stocks because there can be sizeable gains when trading penny stocks. Most of these companies trade over the counter (OTC), but some might also be available on large exchanges, including New York Stock Exchange.
Investors should take precautions when investing in penny stocks. Although there is a high chance of explosive gains, there is also a higher level of risk. Most investors implement certain precautions when investing in penny stocks, such as having a predetermined stop-loss order. In other words, you can set a limit of a minimum share price and, if this limit is reached, the stocks are automatically sold, limiting your loss. This is also true of drone penny stocks.
Why Should Investors Look At Penny Stocks In The Drone Market?
For many years, drones have been mentioned in many news pieces all around the world. As a result, some might be wondering why there is so much focus on them just now. In fact, the drone concept was developed more than a century ago by Nikola Tesla.
With a compound annual growth rate of 56.5%, drone stocks around the world are expected to reach nearly $130 billion by 2025. The main reasons for this massive boom are the newly found applications for drones that expand to almost any industry, as well as the emphasis on drones in military operations and the surge in consumer drones for recreational or professional purposes.
DJI is the world leader for drones and has held this position for almost ten years. The change occurred in August 2019 when the primary purchaser of drones, the US Army, banned its service members from using DJI drones and grounded all of its DJI drones. Both the US government and private companies in the US have started their search for local manufacturers immediately. Because of this switch, drone stocks have the best chance of capturing most of the $130 billion market share.
Alpine 4 Holdings is a diversified company that focuses on technology solutions in the United States. They have developed automotive technologies that improve profitability, productivity, and even customer retention in the dealership industry. The company also developed BrakeActive, a device that can prevent a vehicle from a rear-end collision.
Not many investors have heard of Alpine 4 Holdings so far. One of the main reasons is that it started at a fraction of a penny in 2020, with an impressive price of $0.0001. Everything changed in November 2020 when the company announced its entrance into the commercial drone market after purchasing Impossible Aerospace Corporation. This announcement increased the share price to $0.1 per share, but it was only the beginning.
At the end of December, the board of directors announced their decision to move the stock to the NASDAQ stock exchange, which investors welcomed. At the same time, they also announced the intention to buy yet another drone manufacturer, Vauy US.
Now priced at approximately $4 per share, the company’s stock holds numerous opportunities for investors. Past share price performance reached 5-15% weekly gains with positive prospects in the future.
More specifically, on February 16th, the company announced the creation of A4 Defense Systems after the success of the Impossible Aerospace US-1 Drone. Alpine 4 Holdings recognized the need to diversify activities in order to keep delivering robust surveillance solutions to the US Military. This also created a market opportunity for Alpine 4 Holdings reaching $1.5 billion.
Another growing stock is AgEagle Aerial Systems. It was established in 2010 and started its activity by manufacturing fixed-wing drones for the agriculture industry. In 2019, AgEagle expanded into custom drones used for commercial purposes in various industries, including delivery, transportation, and agriculture.
The stock price was quite volatile from February to March, ranging from approximately $5 to $16. These spikes and drops make it extremely risky. Still, many investors believe in its ability to offer serious returns in the future, and some consider that this is the right moment for purchase, right before it starts skyrocketing.
In 2021, there were rumors that AgEagle will collaborate with Amazon in order to create drones for deliveries, causing the stock price to balloon. More specifically, the company’s website posted an announcement stating that it is engaged in developing e-commerce delivery vehicles; however, this did not identify Amazon specifically, and the investors’ confidence dropped after a lack of confirmation.
Due to market volatility and short-selling, the stock price decreased. As for March 2021, the stock price is rising once again. Even though there is nothing confirmed related to Amazon, AgEagle is still worth investors’ attention as they are currently working on numerous other deals.
Apart from this controversy, AgEagle comes with a few other perks for investors. As a drone-manufacturing leader in the agricultural industry, the company now actively expands into the delivery-drone market. Both of these aspects are believed to take off in the near future.
In fact, a report released in 2020 stated that the delivery drone market would reach $7.4 billion in the next six years with a compound annual growth rate of 41.8%. The agricultural drone market is expected to be about half of this, reaching $3.7 billion by 2027.
Finally, as President Joe Biden issued his executive order in January, the company is bound to be even more successful. More specifically, the current largest drone maker is a Chinese company, while the President stated his preference for American firms.
A small drone company, DraganFly, is based in Canada. At the end of December 2020, the company announced that the US Department of Agriculture chose one of its models to do analysis and data collection tasks. The winning model is known as the DraganFly Commander Ag-Pro, a high-end drone that comes with impressive accuracy and data security, extended flight time, and more. This turned investors’ attention to this small Canadian drone company.
Currently trading at about $2 per share, DraganFly is quite an intriguing pick. Although it had a recent IPO, the company is actually the oldest drone company worldwide. For more than two decades, DraganFly collaborated with police forces and provided public safety technology and devices. Given the ban on the Chinese models, DraganFly seized the opportunity to work with the US government.
Plymouth Rock Technology is a leader in developing safety technologies that address the most critical issues currently threatening society. The company works with law enforcement, the government, and the military to create and innovate solutions. Its core products and services use proprietary technology to scan for threat items from greater distances than any other productions. The AR interfaces aim to eliminate human error.
In February 2021, the company announced the completion of MediMod. This insulated refrigerated storage module was initially developed for organ and blood transport for the UK National Health Service. Due to the pandemic, the module was immediately dispatched to assist with the deployment of vaccines. This aims to access remote places and ensure vaccine efficacy by delivering the doses on time.
Given this, Plymouth Rock Technology is expected to be one of the most rewarding drone penny stocks in the long-term. Apart from delivery drones for medical purposes, Plymouth Rock Technology focuses on other cutting-edge devices and sensors.
For example, Wi-Ti is a concealed system that detects threat items in public areas. In short, this technology can detect threatening or suspicious objects that people may conceal, helping to detect and prevent terror attacks. The company envisions using this technology to detect threats in schools, casinos, parks, sports areas, airports, and many others.
Finally, its PRT-X1 drone developed in 2019 can capture images of given targets. The information is sent to a processing center that analyzes it and sends the data to security personnel to identify threats or targets and provide the exact location. This technology can be used by military and security aircraft and has numerous applications for public safety, rescue missions, and intelligence agencies.
Drone Penny Stocks – The Wrap Up
All in all, drone technology is on the verge of taking off – literally. All investors should watch these top drone penny stocks to support new technology and boost their potential for massive returns. Since the pandemic changed our lives, some people consider that this is the best moment for investing in drone penny stocks.