Publicly Traded Drone Stocks Are a Rare Breed

Drone enthusiasts who want to put their money where their love is may find it difficult to directly invest in some of the big UAV names.

Although there are some funds dedicated to direct UAV investment, companies like DJI and 3D Robotics tend to be funded privately by deep-pocketed venture capitalists. A recent report by analytics group CB Insights data shows that drone-industry investment in 2014 amounted to more than $108 million in 29 private funding partnerships.

A few publicly traded drone companies are flying alongside the VC powerhouses, however. InvestorPlace writer Greg Gambone notes:

“The FAA has granted 746 petitions for exemptions under Section 333, which authorizes those companies to use drones for commercial operations. Of the 746 exemptions, there are surprisingly few publicly traded drone stocks, the most notable being AeroVironment (AVAV). The company manufactures drones and other UAS vehicles, and was granted exemption by the FAA for the purposes of inspecting fixed infrastructures, aerial survey, and patrol operations.”

Gambone points out that technically Amazon can be considered a drone-related company given its recent decision to offer drone delivery. However, he notes: “Delivering Amazon packages via drone is still a long way off, especially since the FAA hasn’t amended the rules regarding the flying of drones outside the line of sight of the operator.”

Writing for Motley Fool, Steve Symington notes that recreational-camera maker GoPro may be a solid bet for investors given its recent foray into the drone world.

“There are many competitors in the space, so this isn’t an automatic win,” Symington stated. “But given GoPro’s brand power and existing base of loyal customers, there’s no sense in leaving a potentially solid opportunity for incremental revenue on the table.”

While the choices for publicly traded companies directly related to drone manufacturing is slim, Cody Willard of the Wall Street Journal points out that at least a few solid companies will benefit greatly from the drone revolution. IXYS Corp manufactures chipsets for robotics, wearable tech and drones as well as power controllers. “Controlling that power efficiently is obviously going to be a huge factor in making drones, robots and wearables cheap enough to operate in a power-starved world,” Willard writes, adding that the company is expecting to see a surge of demand and the stock is underpriced.

Ambarella offers chipsets for HD Video recording and uploading and the firm designs a single chip that can handle video and audio processing. Willard states that the company is currently trading at four times its sales and has experienced growth in the 20-30 percent range over the past few years.