While digging for intriguing growth opportunities on the TSXV, which unfortunately is filled with horrible venture mining penny stocks, I came across a name that definitely sounds like it could become the next big multi-bagger.
Enter Drone Delivery Canada Corp. (TSXV:FLT), a commercial drone technology company that develops, designs and implements drone-based logistics software platforms. The company received a Compliant UAV Operator Flight Operations Certificate (SFOC) from Transport Canada earlier this year, an important milestone as the company continues to make significant strides in a developing industry that can only be described as controversial at this point.
The stock has skyrocketed 400% over the past year, and as the company moves to test its delivery technology in remote locations such as Moose Factory and Moosonee, it’s likely that the stock could continue to soar in conjunction with promising developments like successful flight tests and/or partnerships that may occur on a consistent basis in the months ahead.
Thus far, management has noted that the company’s test flights have shown promise in delivering test payloads exceeding a distance of two kilometres.
While it’s apparent that there are inherent risks of drone delivery systems (and many other regulatory roadblocks that serve to protect the safety of the public), Drone Delivery Canada is hoping to show the world how safe (and valuable) drone deliveries can be by serving remote communities such as the Moose Cree First Nation people first. The Moose Cree First Nation reside in a community that’s only accessible by boat.
By operating in such remote locations, the probability of a malfunctioning drone falling on somebody’s head falls dramatically. And as the technology continues to pick up traction with the addition of safety measures,, Drone Delivery Canada may have an edge over Amazon.com, Inc. (NASDAQ:AMZN), which is primarily looking to serve urban communities, where the risks of harm to the general public are substantially higher.
“Amazon is focused on delivering their goods to their customers, typically in urban settings, but our solution is very different,” said Tony Di Benedetto, CEO of Drone Delivery Canada. “We’re working with some government agencies, logistics companies, and enabling everyone to utilize drone delivery technology as a part of their business.”
It’s not just remote Canadian locations that Drone Delivery Canada has been testing its cutting-edge tech in. Earlier this year, the company also announced the completion of a successful test in the U.S. at the Griffiss International Airport. While having drones flying around major cities is definitely dangerous, by serving firms within isolated environments, the risks associated with drone-assisted logistics fall dramatically, so it’s not too far-fetched to see drones transporting flight cargo at local airports at some point in the distant future.
While Drone Delivery Canada definitely sounds like it could be an opportunity of a lifetime, investors ought to realize the risks involved. The stock is highly speculative and could blow up in the event of an unforeseen regulatory hurdle such as a nationwide ban on drone deliveries if a catastrophic incident ends up happening. Think payloads or drones falling out of the sky and severely injuring or even killing someone on impact.
So, while Drone Delivery Canada is certainly a compelling long-term play for aggressive growth investors, I’d recommend only investing what you can afford to lose. Like marijuana stocks, Bitcoin and various other speculative plays, the stock could lose a majority of its value due to an unforeseen issue.
If you do have the disposable income to put to work, however, Drone Delivery Canada definitely looks like it could hold tremendous promise.
By operating within remote communities and isolated environments like airports, the risks of something going wrong are greatly reduced. As such, the only major question mark is the out-of-this-world valuation, but given the potential for the company to become a pioneer in its space, I think a bet on Drone Delivery Canada would be much smarter than a bet on any form of cryptocurrency or even marijuana!
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joey Frenette has no position in any of the stocks mentioned.