2 Anti Drone Technology Stocks
Whenever you hear that strange whirring sound in the sky and look up to see a drone, you will inevitably start looking around to see who is flying it. It’s strange to know that someone who you don’t know might be watching you. Even animals have been found to experience discomfort when buzzed by drones. With drones being so commonplace now, the topic of “anti-drone technology” has come up. We had some of our on-staff PHDs study this for a while and they came up with a remarkable “anti-drone technology” that’s readily available (in the States), effective, and cheap.
One problem with this solution is that the effective range of your typical shotgun is about 45 yards. Drones can fly much higher than, that but if they were to be used as a weapon, they’d have to fly low at which point your average skeet enthusiast should be able to blow them out of the sky quite easily. There are other solutions available like an anti-drone bazooka called the SkyWall 100 that was used to protect participants in the recent Boston marathon from terrorists with drones and evil intentions. Like these guys.
The anti drone bazooka is pretty much just a large net gun with a range of about 100 yards. It’s hilarious to watch in action, and when you think about it, the method that they are using is about as primitive as a shotgun. In looking at what’s out there in the field of anti-drone technology, we actually found 2 publicly traded companies developing real anti-drone technology that doesn’t involve blasting them with nets. One of these companies called Droneshield just had an IPO this past week.
Founded in 2014, Droneshield (ASX:DRO) is a U.S. company backed by institutional investors that has the intellectual property rights to a cost-effective enterprise-grade sensor that is coupled with software and a database of audio signatures that lives “in the cloud“. This product can effectively detect drones and identify their types at a distance of over half a mile. They first delivered the product in February of 2014 and since then they have sold 198 sensor units to clients that include the Boston marathon in 2015 and 2016, the current head of state of a G7 nation, a major U.S. airport, and the Office of Homeland Security. The company claims to have established 43 distributorships in 31 countries to-date to address a commercial market (i.e. airports, prisons, power plants, ports, factories) that they estimate at around 300,000 installations worth $12 billion.
Droneshield had a very successful IPO raising $5.23 million USD in an oversubscribed offering that sold 35 million shares at .15 cents USD per share. The first day of trading saw shares close up +50% at .22 cents USD per share but since then have fallen to .18 cents USD per share. This gives Droneshield a miniscule market cap of just $21.5 million USD. The first step to protecting against drones is to identify them, so the Droneshield sensors can effectively coexist alongside technology like the “anti-drone bazooka” or even the technology being developed by the second company we’re going to take a look at; Department 13.
Founded in 2010, Department 13 (ASX:DRO) also had an IPO this year to develop their unique anti-drone technology which uses radio frequency (RF) manipulation to take over any drone when it flies into a defined exclusion zone. The technology allows the operator to detect, identify and take control of the drone by manipulating the radio wireless protocol that is running on the ISM band. They currently have a working prototype called the “Mesmer Counter Drone Solution” which can take over drones when they enter a defined airspace. The solution can be seen below.
D13 expect to have a product out in the next 12 months. They also provided this very neat competitive matrix which puts them well ahead of the pack:
By the way, isn’t that kind of taking the piss to put Droneshield on the middle-left of the “completeness of vision” axis considering they are already selling products and Department 13 has just a working prototype? Investors seem to believe that Department 13 will deliver though, as their market cap sits at $39 million USD which is almost twice that of Droneshield’s.
We have warned investors many times not to buy over the counter (OTC) stocks which are sometimes called penny shares or penny stocks. Now by definition, these two companies are penny stocks however it’s important to note that if they were going to try to fleece investors, they probably would have looked to issue shares on the OTC market. The fact that they didn’t is positive. As with any micro-caps traded on any exchange, you’re taking a big risk investing in them. The technology is exciting but doesn’t let that excitement get in the way of rational thinking. Big companies like Airbus have billions of R&D dollars that they can throw into anti-drone technology while these micro-cap stocks don’t. U.S. investors who may want to take a speculative position in either of these anti-drone stocks can read our article on how to buy foreign stocks.
Here at Nanalyze, we complement our tech investments with a portfolio of 30 dividend growth stocks that pay us increasing income every year. Learn how to build your own dividend growth stock portfolio in our report on Quantigence - A Dividend Growth Investing Strategy - freely available to Nanalyze Premium subscribers.