Why AeroVironment Stock Flew Higher Today

shares AeroVironment (NASDAQ:AFAF) The stock is up 6.7% as of 10:20 a.m. ET this morning. Even in the absence of promotions, earnings announcements, or other obviously good news for AV, this makes sense. Up and down the East Coast of the United States, and even into Ohio, headlines are dominated by stories of mysterious unidentified flying objects (UFOs) that look like unmanned aerial vehicles (UAVs).

America is being overrun by drone reports. AeroVironment is America’s most famous manufacturer Drones for the US Army.

According to a recent tally from NBC News, unidentified drones — maybe Chinese, maybe Russian, maybe Alienor perhaps even no drones at all – they have been reported as far south as Florida, as far north as New York, and as far west as Ohio. Rumors are circulating online, with some theorizing that there is an Iranian drone “mother ship” stationed off the East Coast, unleashing waves of drones night after night.

The Pentagon says this is nonsense, of course, but it doesn’t matter. People are worried, and even those who are not worried are fascinated by the story. It makes perfect sense that this would increase investor interest in a leading drone company like AeroVironment.

Whether all this attention makes AeroVironment a stock worth buying is another question. Just two weeks ago, AeroVironment reported third-quarter earnings It shows sales growth of only 4% and profits falling by almost 60%. After stock Still It costs more than 90 times earnings, which is kind of a lofty valuation for a 4% farmer with low earnings.

What better way to play up the drone craze, and the growing calls for the government to “do something” about it? Consider investing in defense stocks focused on combating drone threats, e.g RTXthe leading manufacturer of radars for detecting drones in flight, or Lockheed MartinMaking the Morfius “anti-drone” system to defeat drone swarms.

Both are more logical solutions to the drone threat, and with P/E ratios of 33 and 18 respectively, they’re both significantly cheaper than AeroVironment stock as well.

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