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Drone aircraft could see a lift from a new FAA ruling allowing routine civilian flights, and AeroVironment was one way to play it.
“This is a company that’s trading at 7 percent discount to large-cap defense names, but it’s got growth,” trader Joe Terranova said Monday.
Terranova noted that analysts had lowered guidance for 2012, but he still thought the stock was cheap considering a big potential catalyst.
“One thing it has more than anything else, it’s the potential to be bought and taken over,” he said. “I think the stock stabilizes here, around $25 to $30.”
In a “ Fast Money ” interview, AeroVironment CEO Timothy Conver said the company supplied 85 percent of the drone aircraft used by the Pentagon.
The company’s product line includes aircraft starting at a one-pound airplane, which might be used for surveillance by police forces or the military, to much larger models.
“That allows them to know what they’re getting into, move faster and be much more effective, and we think similar opportunities will be available for public safety applications in the country,” he said.
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