Investing in Multi-Rotor Heli Companies

[Bartman]

Do you have a 401(k) or other savings/investment account that allows you to buy individual stocks? Have you ever tried to identify publicly traded companies that stand to gain/grow/benefit from the continuing popularity of "drone" developments?

Well let's talk about it then!!

I've recently put some of my 401(k) into GoPro (NASDAQ:GPRO) and as I was learning about GoPro I also learned that Ambarella (NASDAQ:AMBA) makes the chip that makes the GoPro work and that many other similar camera manufacturers are rushing to put Ambarella chips into their cameras as well (here's an example).

So which publicly traded companies have you identified as worthy of further investigation? What are the big trends in drones that will make for good investing opportunities?

Batteries?
Software?
Training?
Computing/processing hardware?
Networking integration?
Materials/Construction?
ROI related to "drone" integration with existing businesses (think Amazon.com, Google.com, etc.)?

Let's hear your ideas but please provide links to support claims wherever possible please!

Thanks!
Bartman

 

[Bartman]

Who will be the first publicly traded "drone" specific company?

3D Robotics? Airware? DJI?

Here's a good place to start investigating...
http://www.smalluavcoalition.org/members/

 

[Bartman]

Amazon receives FAA authorization for limited testing. as a potential investor I'd say it's a positive for the company. as an experienced multi-rotor helicopter builder/flyer, I'd say they are about to waste a $hit ton of money!

http://www.faa.gov/news/updates/?newsId=82225&cid=TW303
March 19–The Federal Aviation Administration today issued an experimental airworthiness certificate to an Amazon Logistics, Inc. unmanned aircraft (UAS) design that the company will use for research and development and crew training. The FAA typically issues experimental certificates to manufacturers and technology developers to operate a UAS that does not have a type certificate.

Under the provisions of the certificate, all flight operations must be conducted at 400 feet or below during daylight hours in visual meteorological conditions. The UAS must always remain within visual line-of-sight of the pilot and observer. The pilot actually flying the aircraft must have at least a private pilot’s certificate and current medical certification.

The certificate also requires Amazon to provide monthly data to the FAA. The company must report the number of flights conducted, pilot duty time per flight, unusual hardware or software malfunctions, any deviations from air traffic controllers’ instructions, and any unintended loss of communication links. The FAA includes these reporting requirements in all UAS experimental airworthiness certificates.

 

[Old Man]

Go Pro was a good short term buy after their IPO but fell sharply and quickly. If you didn't see it coming and had a lot into it you've taken quite a beating thus far. To date there's little to indicate reason for a significant increase in valuation. OTOH, it could still be a buy if looking long. Very long.

If I was to consider investing in multirotor technology I'd have to go with the hardware side of things once manufacturing starts to shift from China. And it will. I'd also be looking at some small aerospace companies that are currently deeply involved in designing highly specialized flight controllers/flight systems for small aircraft of any configuration. In addition I'd be looking at firms that specialized in data collection-collation-and dissemination services. Insurance could be another fair consideration.

 

[SamaraMedia]

GoPro is back to almost where it started. Aerovonics had a kickstarter campaign in Australia that sold double what they were looking for $750,000, they got 1.5 mil in less than the expected time.

 

[Bartman]

Insurance could be another fair consideration.

i said to my insurance agent back in january of 2011 that if she was interested she could be filling her every work hour selling commercial policies to sUAS operators but she declined.

@Old Man; any recommendations?

 

[Old Man]

I have to meet with my California agent and discuss a business opportunity All that's needed is an underwriter and qualification standards.

 

[dazzab]

GoPro is back to almost where it started. Aerovonics had a kickstarter campaign in Australia that sold double what they were looking for $750,000, they got 1.5 mil in less than the expected time.

Aeronavics started in Australia but they are a New Zealand company now.

 

[Motopreserve]

I have just been thinking about this very subject, and then BAM! Bart has a thread about it

Great topic. Will be very interesting to see which companies go public first. Exciting times in this quickly shifting industry.

 

[Bartman]

c'mon people! lol

GoPro is back to almost where it started. Aerovonics had a kickstarter campaign in Australia that sold double what they were looking for $750,000, they got 1.5 mil in less than the expected time.

GoPro is almost back like you said and it's going to be interesting to see if their new ideas prove to be as popular and profitable as their initial efforts at making cameras. As I understand it, GoPro is trying to create channels for content to be viewed and with their cameras being so popular those channels can potentially be very busy with amateur and pro content coming in from all directions. But their lower end camera business is being degraded by clones and other companies' progress with their own designs.

GoPro has been extremely successful but to be a good investment going forward they have to show they can continue to make sufficient profits from all of the money they'll be forced to spend (ROI, Return on Investment, making enough money from the investments in new business activities) to expand into new territories. If anyone is in a position to do this, GoPro is but it will be a lot harder for them than what they initially experienced in just making cameras.

Like a lot of good investment ideas, I think the real opportunities will come from knowing what is inside the products we're using. I mentioned Ambarella above....chips, sensors, materials, etc. are usually a better option than the companies making the finished products. But keep in mind, even the most successful unmanned aerial products will still be a fraction of the business activity that a new iPhone creates so the trick is to find the best products/components/services that can generate the maximum business activity.

The folks that understand the processing hardware and software side of this will know the best opportunities just based on what they know is going into the latest circuit boards.

What's the latest and greatest in the world of onboard processors? When UAS and sUAS are communicating with a ground station which comm link is the industry standard? Which processors drive those comm links? Everything has GPS in it, does the GPS element in all of this rely on a specific component that everyone uses just by default? What componentry are developers looking forward to most to make unmanned aircraft even more affordable and more advanced?

Some of you guys know this stuff! Let's hear what you have to say! lol

 

[SamaraMedia]

Aeronavics started in Australia but they are a New Zealand company now.

My bad, thanks dazzab! Great company regardless of location.

 

[tstrike]

I've played AMBA since the low teens for a couple years in and out, always sell a bit earlier than I should. AVAV Aerovironment is a pure play drone manufacturer, but really you'd be better off just going with the big defense manufacturers and collecting a divi. I've lost money whenever I played GPRO, with them it's not about the camera's, they're going for a content collection.

 

[hugh4g]

I visited the Commercial UAV show at Olympia last October, and one of the interesting things was the presence of all the big military firms. Lockheed, BAE systems and several others. Their focus seemed to be on agriculture and mapping. It was interesting to see how expensive a 600 mm uav could be... No more capable to my eye than a dji f550.

Pix4d are already en route with some of this capability.... It's the applications that are interesting.

Hugh

 

[Bartman]

Pix4D is a great suggestion Hugh, not public yet but the potential is there for them to benefit greatly in the years ahead with a level of business activity that could make them a great investment when they do go public.

From their website:

Founded in 2011 after more than ten years of leading scientific research, Pix4D has become the main provider and industry standard for professional unmanned aerial vehicle (UAV) processing software. Started as a spin-off of EPFL in Switzerland, Pix4D is a dynamic and rapidly expanding company with headquarters in Lausanne, Switzerland and local offices in San Francisco, USA and Shanghai, China.

 

[Bartman]

I've played AMBA since the low teens for a couple years in and out, always sell a bit earlier than I should. AVAV Aerovironment is a pure play drone manufacturer, but really you'd be better off just going with the big defense manufacturers and collecting a divi. I've lost money whenever I played GPRO, with them it's not about the camera's, they're going for a content collection.

AMBA had a great day on Friday but so did a lot of other companies. I'm split between GoPro and Ambarella but I'm watching to see when to drop GoPro and move the balance to Ambarella.

 

[Old Man]

I visited the Commercial UAV show at Olympia last October, and one of the interesting things was the presence of all the big military firms. Lockheed, BAE systems and several others. Their focus seemed to be on agriculture and mapping. It was interesting to see how expensive a 600 mm uav could be... No more capable to my eye than a dji f550.

Hugh

You assessment is more accurate than you might think. The large firms that have been serving the military interests are still focused on landing the "big customer" that will sign a contract worth many millions of dollars for direct product along with some level of service contracts that go for several thousands of dollars per flight hour. Because of that, and the enormous size of their corporate establishments, they cannot, or will not, view smaller commercial ventures with lower one time profit potential as a viable activity. They also lack the agility necessary to compete in a field with rapidly changing technology. It takes months or years to complete the many meetings and discussions necessary just to change the time employees will start work in the morning. Making a decision to evaluate, obtain, test, and incorporate new or different technology or products for them is at best an act so ponderous as to make a tortoise appear to be moving at light speed. They cannot survive without the massive financial waste and extravagant costs generated through process and documentation requirements government contracts permit and encourage.

As for the capabilities you observed, what the professional MR and hobby industry is currently doing has been admitted to be ahead of much of the corporate military activities. The smaller corporate aerospace firms are making some incredible advances in technology that could quickly and easily adapt to our needs but they are not getting any traction because they have the same problems with business decisions their big brothers do. They won't entertain customers that won't spend millions of $$ for a singular purchase. They are terrified of the open commercial market and cannot see how they can survive on the smaller margins of a more widespread market. All of my musings here have been developed during direct conversations with owners and other higher level people with several aerospace firms.

 

[tstrike]

AMBA had a great day on Friday but so did a lot of other companies. I'm split between GoPro and Ambarella but I'm watching to see when to drop GoPro and move the balance to Ambarella.

I'd wait for amba to either split or drop back to it's support in the mid 50's, then again it's got one of the highest short interest in the market along with go pro and they can run it like a scalded dog if they choose. Another one to watch is good old IRBT, they're so much more than vacuums. Still under a billion in market cap and it's setting on some strong support right now.

 

[Bartman]

AMBA's a hard call, their market is expanding and their name is becoming a brand reference worth mentioning in the marketing of other brands.

I'd wait for amba to either split or drop back to it's support in the mid 50's,

Worth noting, I'll keep that in mind!

I'm impressed after reading through the info on this page
http://www.ambarella.com/markets/applications

I'd like to know who competes with Ambarella for sales of similar hardware/services. Smaller cameras with increasingly better video aren't a new trend but if AMBA is the go-to source for required componentry then their "fourth stage breakout" as it's being called might not see much of a pullback for a while.

I'm watching it closely, very interesting to say the least.

 

[Bartman]

Here's another one worth considering, seeing that just about every heli and media capture device has their product onboard, SanDisk Corp.(NASDAQ:SNDK). I haven't followed this one very much but they certainly are in a position to continue profiting from the "Drone" explosion!

 

[DucktileMedia]

I've been watching AMBA for a while but never jumped in. instead I bought a TON of GPRO and lost a huge amount of money! I will never buy them again. I should have just bought 100 gopros! I think the camera is great but there is too much competition. And if they do decide to make a drone think of who they are competing against. They cant possibly make money selling drones as it's already saturated with enough cheap RTF's that they would have to essentially give the drone away for free in hopes to sell Gopros to use with them. I'm not sold on that aspect of the business. Personally I dont see the Go Pro channel being a success either. Sure there are millions that might download the Gopro channel on their samsung tv's ( I think it's samsung) but that's not enough to bring the stock back to where it was. I think the gopro will remain the best action cam for a while in terms of image quality. but I dont think they are a good bet as it's still a relatively small market and investors are very greedy when it comes to profits.