August 2021 was a big month for the U.S. Drone Industry, and it’s time to update our DRONES Index and investment portfolios.

The annual AUVSI Xponential conference resumed its in-person gathering (with a virtual component as well) this month, providing a forum for discussion and collaboration between industry and government stakeholders. For those of us in the industry, it was a very exciting time indeed.

Most importantly to us investors, Xponential provided several companies the opportunity to unveil their new products or lines of operation. The timing happened to coincide with Q2 financial releases, where company leadership revealed future plans to their investors.

Due to the events of the last month, I am making a few changes to our DRONES Market Index:

  • Adding Joby Aviation (JOBY), as it conducted its IPO this month
  • Upgrading Verizon Communications (VZ) and QualComm Inc. (QCOM) from the “Honorable Mentions” list, to the main DRONES Index, due to their announcements of dedicated drone-related products and services
  • Re-balancing relative weightings of companies on the index, as I further researched their involvement in the Drone Industry

As usual, the chart data was constructed with one button (and 10 seconds of waiting) by my automated investing research tools; it’s the act of formatting the graph into a nice-looking image that still takes me a few minutes. This will be one of my next development endeavors.

I’ll start by refreshing the overall DRONES Index, and then breaking down the changes in its strategy-oriented subsets.

DRONES: U.S. Drone Market Index, by Paladin Automation LLC

Ticker  Name  Asset Allocation

AVAV AeroVironment, Inc. 8.13%

UAVS AgEagle Aerial Systems, Inc. 8.13%

JOBY Joby Aviation, Inc. 8.13%

KTOS Kratos Defense & Security Solut 7.32%

WKHS Workhorse Group, Inc. 6.50%

LHX L3Harris Technologies, Inc. 5.69%

AMBA Ambarella, Inc. 4.88%

MRCY Mercury Systems Inc 4.88%

TXT Textron Inc. 4.88%

TRMB Trimble Inc. 4.07%

HEI Heico Corporation 3.25%

PLTR Palantir Technologies Inc. 3.25%

VLDR Velodyne Lidar, Inc. 3.25%

TDY Teledyne Technologies Incorpora 2.44%

IIVI II-VI Incorporated 2.44%

GD General Dynamics Corporation 1.63%

CMTL Comtech Telecommunications Corp 1.63%

GPRO GoPro, Inc. 1.63%

GFF Griffon Corporation 1.63%

NOC Northrop Grumman Corporation 1.63%

JBL Jabil Inc. 1.63%

NVDA NVIDIA Corporation 1.63%

UPS United Parcel Service, Inc. 1.63%

FDX FedEx Corporation 1.63%

BA Boeing Company (The) 0.81%

LMT Lockheed Martin Corporation 0.81%

HON Honeywell International Inc. 0.81%

RTX Raytheon Technologies Corporati 0.81%

INTC Intel Corporation 0.81%

AMZN Amazon.com, Inc. 0.81%

WMT Walmart Inc. 0.81%

GOOGL Alphabet Inc. 0.81%

VZ Verizon Communications Inc. 0.81%

QCOM QUALCOMM Incorporated 0.81%

Yield: 0.43%                         Beta (5Y Monthly): 1.38

DRONES Income Portfolio

Ticker   Name   Asset Allocation

LHX L3Harris Technologies, Inc. 26.92%

GD General Dynamics Corporation 7.69%

CMTL Comtech Telecommunications Corp 7.69%

GFF Griffon Corporation 7.69%

NOC Northrop Grumman Corporation 7.69%

UPS United Parcel Service, Inc. 7.69%

FDX FedEx Corporation 7.69%

BA Boeing Company (The) 3.85%

LMT Lockheed Martin Corporation 3.85%

HON Honeywell International Inc. 3.85%

RTX Raytheon Technologies Corporati 3.85%

INTC Intel Corporation 3.85%

WMT Walmart Inc. 3.85%

VZ Verizon Communications Inc. 3.85%

QCOM QUALCOMM Incorporated 3.85%

Yield: 1.95%                         Beta (5Y Monthly): 1.16

As a refresher, the Income portfolio is comprised of companies that offer a dividend greater than 1% yield. There is one company on this list that used to offer a dividend, but had to cut it during the pandemic; we are hopeful that they will resume it at some future date (I’m looking at you, Boeing!). Overall, these companies are “Drone Diversified”, in that drones are a minor portion of their business; however, their investment of millions-to-billions of dollars benefits the entire Drone Industry.

DRONES Growth Portfolio

Ticker   Name   Asset Allocation

AVAV AeroVironment, Inc. 13.51%

UAVS AgEagle Aerial Systems, Inc. 13.51%

KTOS Kratos Defense & Security Solut 12.16%

AMBA Ambarella, Inc. 8.11%

MRCY Mercury Systems Inc 8.11%

TXT Textron Inc. 8.11%

TRMB Trimble Inc. 6.76%

HEI Heico Corporation 5.41%

PLTR Palantir Technologies Inc. 5.41%

TDY Teledyne Technologies Incorpora 4.05%

IIVI II-VI Incorporated 4.05%

GPRO GoPro, Inc. 2.70%

JBL Jabil Inc. 2.70%

NVDA NVIDIA Corporation 2.70%

AMZN Amazon.com, Inc. 1.35%

GOOGL Alphabet Inc. 1.35%

Yield: 0.03%                         Beta (5Y Monthly): 1.59

As a refresher, these are the companies that do not offer a great dividend, so investors count on earnings growth for capital gains. Volatility is a bit higher, but so is the potential ROI. These are both “Drone-Dedicated” and “Drone-Diversified” companies.

DRONES Speculation Portfolio

Ticker  Name  Asset Allocation

JOBY Joby Aviation, Inc. 45.45%

WKHS Workhorse Group, Inc. 36.36%

VLDR Velodyne Lidar, Inc. 18.18%

Yield: 0.00%                         Beta (5Y Monthly): Undefined

These are new entrants to the publicly-traded market, and do not yet have a 5-Year history of volatility; once they reach this milestone, the Beta is expected to be quite high.

Note that this graph is tracking only WKHS until 2019, when VLDR went public. It then gets a boost in 2021 when JOBY enters the arena. The spikes you see here are not necessarily high returns; they are a ticker’s price going from zero to some positive number, overnight.

These companies have not yet demonstrated consistent revenue and positive earnings, and are largely backed by early investors to stay afloat while they navigate the Valley of Debt. But, they are in the business of bringing something truly new and innovative to our society, and there is always that chance that they will become a Fortune 500 company in the future….

That wraps it up for this update! In the six months that I have been covering the DRONE Index, this is the third update I’ve had to make. I think this speaks highly of how quickly the industry is moving, and I am truly excited to see how it will change in the years to come. The simple fact that several S&P 500 companies (in multiple sectors!) are even on this list demonstrates a level of technological and financial support that I believe will lay a solid foundation for smaller companies, for years to come.

As always, please be advised that I am not a certified Financial Advisor, and that I own shares of several companies discussed on this blog. Please do your own due diligence prior to investing, and always consult a financial professional prior to putting your cash at risk.

Moreover, remember that I am covering an emerging industry, not giving investment advice. Many of these companies are, in fact, bad investments. Most do not meet the growth or income requirements that meet a retail investor’s strategy. Make your own plan, do your own homework, and I hope that we all achieve our investment objectives.


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