Unmanned Aerial Vehicle (UAV) Market: It’s Taking Off

Unmanned Aerial Vehicles, or UAVs, or drones are making headlines daily, as part of military exercises or in a variety of other ways. The market for these vehicles has begun to grow and is expected to keep growing in the near future.

Shadow UAV photo courtesy of Wikipedia.org

 Market research estimates the global UAV market is now about $15 billion this year, with growth to up to $20 billion annually by 2020. Part of the reason for the growth is the FAA is opening up air space to commercial activities.

There are several high-profile, large cap companies such as Lockheed Martin and Boeing, active in this space. But so are many smallcaps, including:

Monrovia, CA-based AeroVironment, Inc. (NASDAQ:AVAV; http://www.avinc.com/) engages in the design, development, production, support, and operation of unmanned aircraft systems, and efficient energy systems for various industries and governmental agencies.  Revenue in 2012 reached $325 million with fully diluted earnings per share of $1.36, representing compound annual growth of more than 20 percent since 2010.  Its market cap is now $503 million and the 52-week trading range is $21.14-$34.28.  The stock has taken a beating lately and at the close of market July 24 was trading at $22.96, down 88 cents for the day.

Calabasas, CA-based National Technical Systems * (NASDAQ:NTSC; http://www.nts.com/) is a leading provider of testing and engineering services with the largest network of test laboratories and engineering service centers in North America and more than 50 years of experience.  It offers an end-to-end UAV service including the design and integration of a payload, help with building a POD, testing of UAVs, even flying missions.  The Company’s 52-week trading range shows it was trading for as low as $4.02 in November, but has been reaching new highs in the low $7s this month.  Its market cap is currently around $81 million. It closed July 24 at $7.12, down 1 cent on the day.

Carson, CA-based Ducommun Incorporated (NYSE:DCO; http://www.ducommun.com/) provides engineering and manufacturing services to the aerospace, defense, and other industries through a wide spectrum of electronic and structural applications.  Its capabilities include aviation and UAV sensors.  The stock is trading near the bottom of its 52-week range ($7.71-$23.54), and the market cap is around $105 million. It closed July 24 at $9.94, up 1 cent for the day.

Austin, TX-based Astrotech Corp. (NASDAQ:ASTC; http://www.astrotechcorp.com/), through its subsidiaries, has provided support for manned and unmanned launch vehicles for the last 30 years.  It is a leading provider of commercial aerospace services, and one of the first space commerce companies.  Its market cap is about $21 million and its 52-week trading range is $0.50-$1.34. It closed July 24 at $1,11, down 3 cents for the day.

Edgewood, NY-based CPI Aerostructures Inc. (NYSE:CVU; http://www.cpiaero.com/) is engaged in the contract production of structural aircraft parts principally for leading the U.S. Air Force and other branches of the U.S. armed forces.  As a subcontractor to leading defense prime contractors, the company delivers various pods, and modular and structural assemblies for military aircraft.  The Company’s 52-week trading range is $8.78-$16.42, and the market cap is currently about $75 million. It closed July 24 at $10.69, down 11 cents on the day.

Dulles, VA-based Orbital Sciences Corp. (NYSE:ORB; http://www.orbital.com/) develops and manufactures small- and medium-class rockets and space systems for commercial, military and civil government customers.  The company`s primary products are satellites and launch vehicles, including low-Earth orbit, geosynchronous-Earth orbit and planetary spacecraft for communications, remote sensing, scientific and defense missions; human-rated space systems for Earth-orbit, lunar and other missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles.  The market cap is currently about $739 million and its 52-week trading range is $10.59 to $18.48. It closed July 24 at $12.53, down 17 cents for the day.

* Denotes client of Allen & Caron, Inc., publisher of this blog


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