Drones Just Took Two Giant Steps Toward Daily Use; AeroVironment Is Your Best Play

Coming to the skies above your neighborhood: commercial unmanned aerial vehicles (UAVs). It seems like science fiction, but UAVs will soon dot the national airspace to perform a range of non-military functions from delivering packages to spraying crops to inspecting oil pipelines.

The company most likely to benefit from this trend is AeroVironment (AVAV) . The Monrovia, Calif.-based company is the country's largest manufacturer of UAVs and is known for its innovative products. Revenue and net income both rose in the last quarter, and the company is spending wisely on research and development that will keep its products cutting edge. 

We also unveil a little-known investment method that makes steady profits in good times and bad.

In recent weeks, two major developments brought drones closer to daily use. The NASA Armstrong Flight Research Center in California this month completed the first phase of flight tests on detect-and-avoid technology that will allow large UAVs to operate in the national airspace above 500 feet.

In late June, the Federal Aviation Administration (FAA) released its long-awaited rule for small UAVs weighing less than 55 pounds conducting commercial operations. Key aspects of the rule include:

  • A requirement for UAV pilots to keep their aircraft within visual line of sight.
  • Allowing UAV operations during daylight and at twilight for drones equipped with anti-collision lights.
  • Height and speed restrictions and other operational limits, such as prohibiting flights over unprotected people on the ground who aren't directly participating in the UAV operation.
  • A process to waive some restrictions if an operator proves the proposed flight will be conducted safely under a waiver.

According to industry estimates, the new FAA rule could generate more than $82 billion for the U.S. economy and create more than 100,000 new jobs over the next decade.

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