InvestMacro

Source: Streetwise Reports  (12/9/22)

With the need for counterdrone technologies rising, Australian and U.S.-based DroneShield Ltd. has released a lot of news. Read more to learn about the company’s myriad of orders, the DOD recommendation, and the recent million-dollar placement.

DroneShield offers what is known as counterdrone systems, which can interfere with or disable remote-controlled ground surveillance drones during operation and while in flight.

Due to the practical application of drones in modern warfare, the counterdrone technology marketed by DroneShield has attracted the attention of major military electronic warfare organizations, such as the ISREW branch of the Australian Joint Systems Division, The United States Department of Defense, and the Department of Homeland Security.

Why Is Counterdrone Technology Taking Off?

While drones can be extremely useful, they can also pose serious threats. They can be used for drug smuggling, interfere with planes if they are used in airspace near airports, or uncover secure data that should not be released. Because of this, it is imperative we have the technology to counter them by jamming their signal or taking them down completely, and this has become more important now than ever.

As the U.S. Government Accountability Office says, “With over 2 million drones projected in the U.S. by 2024, these risks are likely to grow.”

National Defense Business and Technology Magazine reported that Meni Deutsch, the regional director for Europe at Skylock Anti-Drone Technologies, said, “We have been witnessing the growing demand for anti-drone systems and technologies.”

This demand has led to massive projected growth. The counterdrone market was already at “US$1.1 billion in 2021 and is anticipated to register a CAGR [compound annual growth rate] of 28.3% from 2022 to 2030,” which could provide ample opportunity to investors.

As for DroneShield, the company “differentiates itself from the rest of the market by offering an end-to-end counterdrone solution with largely in-house technology,” Daniel Laing of Bell Potter Securities wrote in a September report.

A Plethora of Orders

DroneShield has also identified critical markets for its counterdrone technology in correctional facilities, government offices, and airport security.

Laing of Bell Potter identified “the deployment of its technology at U.S. military bases following the U.S. DOD recommendation” as a “key catalyst for DroneShield’s projected growth.”

Airports have been on the watch for technology to counter drones. That need was amplified after several incidents, one being the 2018 Gatwick affair, where one of the U.K.’s most popular airports had to suspend all travel after multiple drones were sighted along its airfield.

Since then, “stakeholders at airports all over the world have called for a solution that can identify unauthorized drones — while complying with laws that generally prohibit interference with aircraft,” reported DroneLife.

This led to DroneShield’s August 2022 announcement of its first permanent deployment of DroneSentry at a U.S. airport. You can see a video demonstration of how the Sentry works here.

Then on October 25, 2022, the company received a AU$900,000 order contract for portable counterdrone systems for an undisclosed Asian country. This led to the company trading 2.56% higher on the announcement day.

Last month, DroneShield also announced it would receive AU$1 million from an unnamed international government agency. In this order, the company would provide several of its DroneSentry-X units. DroneSentry-X is vehicle compatible counterdrone device. You can read more details about it here and see a video demonstration of the product through this link.

Payment and shipment are expected before the end of the quarter. The company reported that “for this customer, it is an initial purchase that follows trials, and is expected to follow up with a number of additional systems, to be acquired in 2023.”

First Catalyst:  U.S. DOD Recommendation

As the need for countdown technology intensifies, the department of defense has decided to spend at least US$668 million on counterdrone research and development and at least US$78 million on the acquisition by the 2023 fiscal year.

Technical Analyst Clive Maund rated the company an Immediate Buy and said, “with the outlook for orders and earnings improving dramatically, it is clear that there is everything to go for here.”

Along with this, the DroneShield happily unveiled it had been recommended by the U.S. DoD’s Joint Counter-small Unmanned Aircraft Systems Office (JCO) as part of the Science Applications International Corporation (SAIC) joint solution for Counter-UAS as a Service (CaaS).

CEO and managing director Oleg Vornik told Streetwise Reports that DroneShield is proud to have this recommendation and that they “look forward to installations next year as now [the] recommendation has been made to implement the rollout of counter drone systems across the U.S.”

Laing of Bell Potter identified “the deployment of its technology at U.S. military bases following the U.S. DOD recommendation” as a key catalyst for DroneShield’s projected growth.”

These inroads maintained with major government organizations have established the “validation of the sales pipeline through consistent contract wins,” which Laing claims to be an additional, concurrent catalyst for DroneShield’s sustained growth in other sectors.

Second Catalyst: Placement With Epirus

DroneShield also unveiled the organization of a placement of 18.5 million shares with technology investment firm Epirus Inc.

Epirus Inc., named after the unending arrows of the Greek hero Theseus, is a technology company that creates software-defined directed energy systems, which are used to counter electronics from various ranges.

Gavegan of Peloton Capital projects that the funding received from Epirus will contribute toward “the scaling up of engineering and operations in support of current momentum.”

Vornik spoke with Streetwise Reports about the deal, saying that DroneShield and Epirus have been working together for a while now. This is due to their complementary technologies, as DroneShield focuses on drone detection while Eprius focused on defeating drones through high-powered microwave weapons systems.

According to Peloton Capital, the market volume saturation resulting from this deal “represents a discount of 2.4% to the last closing price of AU$0.21 per share.”

At around AU$0.20 per share, Epirus’s placement has provided DroneShield an additional AU$3.7 million in operating capital. Peloton reports that this deal grants Epirus a 4.1% shareholder stake in the upstart Australian counterdrone company.

Shane Gavegan of Peloton Capital noted that DroneShield plans to direct this incoming investment capital toward “the scaling up of ready inventory and long lead items to rapidly fulfill anticipated orders.”

Analysts and Newsletter Commentary 

DroneShield is covered by a surfeit of analysts, including Finola Burke of RaaS Advisory Pty Ltd., and previously mentioned Daniel Laing of Bell Potter Securities Ltd., and Shane Gavegan of Peloton Capital. 

Laing suggested an estimated “AU$50 million worth of projects for 2022 and about AU$180 million worth for next year and further out” to be fulfilled by DroneShield — a matter of bolstering its supply to meet steady demand. The company, according to Laing, is well positioned to “capitalize on favorable macroeconomic conditions accelerating structural growth in the market.”

There is also evidence to suggest that this demand for DroneShield’s military technology will grow considerably in the coming quarters, where Gavegan projects that the funding received from Epirus will contribute toward “the scaling up of engineering and operations in support of current momentum.”

This momentum is echoed in the words of Peloton analyst Darren Odell, who noted that the counterdrone company is “currently selling its systems in the Five Eyes countries, the Middle East, and Ukraine.”

Technical analysts Clive Maund also commented on the stock in an August 9, 2022, post.

There Maund said, “the fundamentals of the company have continued to improve at an ever more rapid rate.”

He rated the company an Immediate Buy and said, “with the outlook for orders and earnings improving dramatically, it is clear that there is everything to go for here.”

Both Peloton and Bell Potter also maintain their Buy recommendations on DroneShield.

Click “See More Live Data” in the data box above to view more of what they are saying.

Ownership and Share Structure

Approximately 11% of DroneShield’s stock is owned by management, with CEO Oleg Vornik claiming 15.3 million shares at a majority stake of 3.39%. Other internal stakes are maintained by CFO Carla Balanco at 3.2 million shares, as well as board member Peter James with 9.3 million.

Without any institutional shareholders, the remaining 89% of DroneShield’s outstanding shares are retail.

By the end of the September quarter, the company had a cash balance of AU$7.5 million, along with the AU$3.7 million from Epirus. They ended the quarter slightly cash flow positive and expect to either break even or be cash flow positive this quarter. 

A micro-cap, DroneShield currently boasts an approximate AU$90 million market cap on 432 million outstanding shares spread across more than 8,000 investors. Approximately 378 million shares are free-floating. In addition, as noted by analyst Daniel Laing of Bell Potter Securities, DroneShield operates without bank debt and has an estimated AU$7 million in cash available as capital expenditure.

It currently has 451.04 million shares outstanding and trades in the 52-week range between AU$0.188 and AU$0.20.

Disclosures:
1) Katherine DeGilio and Tom Griffin wrote this article for Streetwise Reports LLC and Tom Griffin provides services to Streetwise Reports as an independent contractor. They members of their household own securities of the following companies mentioned in the article: None. They or members of their household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with DroneShield Ltd. Please click here for more information.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of DroneShield Ltd., a company mentioned in this article.

By RoboForex.com

BRENT

On H4, the quotes of Brent oil are below the 200-day Moving Average, which indicates the prevalence of a downtrend. However, the RSI is already in the oversold area. A test of 0/8 (75.00) should be expected, followed by a bounce off it and growth to the resistance level of 2/8 (81.25). The scenario can be cancelled by a downward breakaway of the support level of 0/8 (75.00). In the case, the quotes may fall to -1/8 (71.88).

On M15, the upper line of VoltyChannel is too far away from the current price, which means growth of the quotes will be initiated by a bounce off 0/8 on H4.

S&P 500

On H4, the S&P 500 quotes have dropped under the 200-day Moving Average again, indicating a downtrend. The RSI is testing the resistance line. In the end, a downward breakaway of the support level of 1/8 (3906.2) should be expected, followed by falling to 0/8 (3750.0). The scenario can be cancelled by rising over the resistance level of 2/8 (4062.5). This might lead to a trend reversal and growth of the quotes to 3/8 (4218.8).

On M15, an additional signal confirming the decline will be a bounce off the lower line of VoltyChannel.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

So much for the conventional wisdom of the “balanced portfolio”

By Elliott Wave International

In his February 2022 book, Last Chance to Conquer the Crash, Robert Prechter said:

Countless advisors have counseled “diversification,” a “balanced portfolio” and other end-all solutions to the problem of allocating your investments. These approaches are delusional. … No investment strategy will provide stability forever.

That certainly has applied to the classic 60% stocks / 40% bonds portfolio this year.

On Oct. 14, a Reuters headline said:

’60/40′ Portfolios Are Facing Worst Returns in 100 Years: BofA

Of course, everyone knows that stocks are risky, but many investors expect bonds to provide a cushion in case equities slide into a downtrend. And, indeed, the stock market has been trending lower since January.

But bond prices have taken a hit, too. A BIG one. As you probably know, bonds prices decline when yields rise and that’s what’s taken place.

You may find it hard to believe, but Elliott wave patterns and sentiment readings in the bond markets warned of this. For example, the July 2021 Elliott Wave Theorist, a monthly publication (since 1979) which analyzes financial markets and major cultural trends, showed this chart and said:

U.S. Treasury bill rates have edged closer and closer to zero for over a year. The complacency about the nonexistent T-bill yield in the face of unprecedented inflating by the government and the Fed is truly amazing. … The Fed’s cavalier inflating is borne of optimism. … When optimism and complacency finally melt like popsicles in the sun, the lines in [the chart] will turn up.

During that same month / year (July 2021), The New York Times ran this headline:

Federal Reserve Officials Project Rate Increases in 2023 [emphasis added]

This next chart of the 6-month U.S. Treasury bill yield, which published in the Nov. 18, 2022 Elliott Wave Theorist, shows what we all know: Rates began to turn up more than a year before 2023 and then soared higher.

The question now is: What’s next?

Elliott wave analysis answered this question before, and it can help you answer it now.

You can read more about what Elliott Wave Theorist editor, and EWI Founder, Robert Prechter expects next in the Special Report: Preparing for Difficult Times. The report is free — for a limited time — inside their “12 Days of Elliott” event. You need only join Club EWI to read it, along with 11 other fascinating resources, December 1-12.

You can join Club EWI without any cost or obligation. All the while, you’ll enjoy complimentary access to an abundance of Elliott wave resources on financial markets and investing.

Get started by following the link: 12 Days of Elliott — get free and instant access.

Source: Streetwise Reports  (12/7/22)

Summit Therapeutics Inc. shares traded 194% higher yesterday after the company reported it entered into an in-license agreement with Akeso Inc. for its breakthrough bispecific antibody ivonescimab, which combines a blockade of PD-1 with an anti-VEGF into a single molecule designed to target cancer. Summit has agreed to pay Akeso an upfront payment of US$500 million, which it plans to finance via an equity rights issuance.

Summit Therapeutics explained that ivonescimab, known as AK112 in China and Australia and SMT112 in the U.S, Canada, Europe, and Japan, is “a novel, potential first-in-class bispecific antibody combining the power of immunotherapy via a blockade of PD-1 with the anti-angiogenesis benefits of an anti-VEGF into a single molecule.”

The report indicated that ivonescimab is believed to be the most advanced PD-1 / VEGF bispecific antibody advanced in clinical studies, though to date, neither the U.S Food and Drug Administration (FDA) nor the European Medicines Agency (EMA) have granted approval for any PD-1- based bispecific antibodies. Summit mentioned that ivonescimab has received Breakthrough Therapy Designation status in China from The National Medical Products Administration (NMPA) for three separate indications relating to non-small cell lung cancer (NSCLC).

The agreement will provide Summit with the rights to advance, market, and commercialize SMT112 (ivonescimab) in the U.S, Canada, Japan, and Europe, with Akeso retaining the rights to develop and sell ivonescimab in China, Australia, and all other areas except for those assigned to Summit. The report stated that Akeso is considered to be a pioneer and source originator in creating and developing novel antibodies and that the in-license arrangement with Summit will allow it to advance its goals of becoming a global biopharma firm.

For its part, Summit will make an upfront payment in the amount of US$500 million to Akeso. Akeso will be eligible to receive up to an additional US$4.5 billion if certain regulatory and commercial milestones are achieved, along with low double-digit royalties on net sales.

The offering is expected to provide the company with gross proceeds of up to US$500 million, which it plans to utilize to pay its upfront payment to Akeso, support clinical development and regulatory approval for SMT112, and expand its drug pipeline.

Summit Therapeutics’ Chairman and CEO Robert W. Duggan commented, “The partnership between Summit Therapeutics and Akeso is a strategically compelling opportunity . . . We are extremely encouraged by ivonescimab and the potential for improving the quality and duration of patients’ lives based on clinical data to support this point.”

Akeso’s Co-founder, Chairwoman, CEO, and President, Dr. Michelle Xia, stated, “Ivonescimab has demonstrated the potential to deliver superior clinical benefit for patients and tremendous value for investors . . . The Akeso team has been dedicated to the development of ivonescimab for the past eight years and proudly advanced the molecule to the clinical Phase 3 stage. The global value of ivonescimab awaits great work from a great team to realize.”

“We look forward to the swift execution of the clinical development and commercial plan in a global setting for ivonescimab,” Xia added.

Summit Therapeutics advised that in a Phase 2 NSCLC trial that included patients with failed EGFR-TKI’s, those treated with ivonescimab demonstrated “an overall response rate (ORR) of 68.4% and a median Progression-Free Survival (mPFS) time period of 8.2 months when combined with combination chemotherapy (pemetrexed and carboplatin) as compared to historical mPFS of 4.3 months in patients treated with combination chemotherapy (pemetrexed and platinum-based chemotherapy) alone.”

Ivonescimab is now being developed in China and Australia for use in treating multiple solid tumors and is currently being evaluated in a Phase 3 clinical trial in patients with NSCLC that is positive for an epidermal growth factor receptor (EGFR) mutation and whose disease has progressed after treatment with an EGFR tyrosine-kinase inhibitor (TKI).

Co-CEO, President, and Summit Board Member Maky Zanganeh remarked, “We have found the ideal partnership with the potential to change the paradigm for treating patients facing difficult odds with devastating diagnoses . . . 10 years ago, metastatic lung cancer patients rarely survived for more than ten to twelve months from diagnosis. Today, survival can be measured in years.”

Summit advised that it intends to finance its obligations under the agreement by the issuance of a rights offering that will allow its common shareholders of record to purchase non-transferable subscription rights to buy common shares at the lesser of US$1.05 per share or the five-day volume weighted-average price of its shares prior to the date of the transaction. The offering is expected to provide the company with gross proceeds of up to US$500 million, which it plans to utilize to pay its upfront payment to Akeso, support clinical development and regulatory approval for SMT112, and expand its drug pipeline.

Summit Therapeutics is a biopharmaceutical firm headquartered in Menlo Park, Calif. The company is engaged in discovering, developing, and commercializing medicines to treat cancer, infectious and other diseases with high unmet needs. The firm is highly focused on developing SMT112 (ivonescimab), which was engineered to combine two well-established oncology-targeted mechanisms of action. Initially, the company’s SMT112 development efforts at being directed at treating NSCLC. Summit plans to begin treating patients in clinical studies by Q2/23.

Akeso is a biopharma company engaged in the discovery, development, manufacturing, and marketing of medicines designed to address high unmet medical needs worldwide. The company’s pipeline includes more than 30 assets that are being developed to treat cancer, autoimmune disease, inflammation, metabolic disease, and other therapeutic areas. To date, 17 of these product candidates have been advanced into clinical trials. Akeso’s Kaitanni (cadonilimab) received approval from China’s NMPA in June 2022 for use in the treatment of relapsed or metastatic cervical cancer in patients who progressed on or after platinum-based chemotherapy making it the first commercialized PD-1-based bispecific drug globally.

Summit Therapeutics started off the day yesterday with a market cap of around US$158.0 million with approximately 201.3 million shares outstanding. SMMT shares opened 68% higher yesterday at US$1.32 (+US$0.535, +68.15%) over the previous day’s US$0.785 closing price. The stock traded yesterday between US$1.19 and US$1.59 per share and closed for trading at US$1.54 (+US$0.755, +96.18%).

Disclosures:

1) Stephen Hytha wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

Source: Streetwise Reports  (12/1/22)

Shares of Titan Machinery Inc. traded 26% higher yesterday to a new 52-week high after the company reported Q3/23 financial results, highlighting a 47.3% YoY increase in revenue. The firm additionally raised its full-year revenue and earnings estimates.

Titan Machinery Inc. (TITN:NASDA), which owns and operates more than 100 full-service stores in the U.S. and Europe, yesterday announced financial results for the third quarter of 2023, which ended October 31, 2022.

The company’s Chairman and CEO, David Meyer, led off the report by stating, “We delivered another consecutive quarter of record financial results, with third-quarter earnings per share of US$1.82. The ongoing strength of the agriculture sector combined with our customer-centric focus drove consolidated revenue growth of 47%, which was supported by strong contributions across each of our revenue streams – equipment, parts, and service . . . Given these strong third-quarter results, coupled with our expectations for the solid market fundamentals continuing through the fourth quarter, we are increasing our earnings per share modeling assumption for the fiscal year 2023 to a midpoint of US$4.70 per share.”

Gross profit in Q3/23 rose to US$139.6 million (20.9%), up from US$92.5 million (20.4%) in Q3/22. The company indicated that the increases were due mostly to stronger margins from equipment sales.

The firm reported that total revenue during Q3/23 increased by 47.3% to US$668.8 million, compared to US$454.0 million in Q3/22.

Revenues across almost all business segments increased versus the same period in the prior year and consisted of US$509.0 million from Equipment sales, US$108.7 million from parts sales, US$39.0 from Service, and US$12.1 million from rental and other sales.

Gross profit in Q3/23 rose to US$139.6 million (20.9%), up from US$92.5 million (20.4%) in Q3/22. The company indicated that the increases were due mostly to stronger margins from equipment sales.

Titan Machinery reported that for Q3/23, it recorded a net income of US$41.3 million, or US$1.83 per diluted share, versus a net income of US$21.8 million, or US$0.97 per share in Q3/22.

The firm added that during Q3/23, adjusted EBITDA increased by 80% to US$63.5 million, compared to US$35.3 million in Q3/22.

The company advised that in Q3/23, agriculture segment revenues grew to US$493.3 million, compared to US$281.5 million in Q3/22. The firm said the gains were the result of a combination of positive organic growth and contributions from three separate company acquisitions.

Titan added that during Q3/23, construction segment revenues increased to US$86.4 million, up from US$79.7 million in Q3/22, driven by increased demand for equipment, and listed that it posted revenues of US$89.0 million in its international segment.

CEO Meyer commented further that “The momentum in our business continues to be visible across all aspects of Titan Machinery, as favorable industry conditions combine with several years of operational improvements and solid growth through accretive and strategic acquisitions . . . Looking ahead, we are very well positioned to serve the strong industries that we operate in with our robust balance sheet and powerful operational performance.”

The company offered some upward adjusted forward guidance and stated that for FY/23, it expects that agriculture revenue will be up 55-60% year-over-year, compared to its prior estimates of 50-55%. The firm stated that construction revenue is expected to decrease by 0-5% y-o-y, and international segment revenue is also projected to be down by 0-5% y-o-y. Titan Machinery added that for FY/23, it now expects it will have diluted earnings per share (EPS) of US$4.55-4.85. Prior estimates called for diluted EPS of US$3.70-4.00.

Titan Machinery owns and operates full-service agricultural and construction equipment dealer locations in North America and Europe. The company is based in West Fargo, N.D., and offers products and services to farmers, ranchers, and other commercial customers from its network of over 100 dealer locations in Europe and 13 U.S. midwestern and western states.

The firm’s international stores are located in Bulgaria, Germany, Romania, and Ukraine. Titan noted that each of its store locations represents one or more of CNH Industrial N.V.’s (CNHI:NYSE; CNHI:MI) equipment brands, including Case Construction, Case IH, CNH Capital, New Holland Agriculture, and New Holland Construction.

Titan Machinery started the day with a market cap of around US$787.17 million yesterday with approximately 22.57 million shares outstanding. TITN shares opened 15% higher yesterday at US$40.20 (+US$5.32, +15.25%) over the previous day’s US$34.88 closing price and reached a new 52-week high price yesterday afternoon of US$44.29. The stock traded yesterday between US$38.31 and US$44.29 per share and closed for trading at US$44.03 (+US$9.15, +26.23%).

Disclosures:

1) Stephen Hytha wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Source: Streetwise Reports  (11/29/22)

Volatus Aerospace Corp. could be a company to watch in the fast-growing drone aviation market.

Volatus Aerospace Corp. (VOL:TSX; VLTTF:OTCQB) is a small, little-known player that could make a big impact in the burgeoning but rapidly growing multi-billion dollar commercial drone market.

Volatus is one of several players looking to carve a piece out of the global drone market expected to approach US$50 billion in annual revenues in the next seven years.

Earlier this month, the Canadian-based company, which serves the commercial and defense markets with integrated drone solutions, reported record revenue of CA$11.12 million, up 68% over the previous quarter and a 238% jump from the same period a year ago.

Building Revenue

Volatus is building revenue from sales of drone equipment, drones-as-a-service, training services, and crewed aircraft sales and services. The recent jump in revenue was driven by organic growth, scale in drone activities, and an increase in aviation revenue.

Global revenue from drones was valued at US$6.51 billion last year, expected to reach US$8.15 billion this year and jump to US$47.38 billion by 2029, according to a report by Fortune Business Insights.

The war in Ukraine has created a need for drones that will continue long after the conflict has ended, said Volatus Chief Executive Officer Glen Lynch during a conference call about the company’s earnings results earlier this month.

“Drones will have a major role to play in the reconstruction . . .  of the country,” Lynch said. “The conflict in Ukraine literally changed the way countries around the world are looking at the use of drones and modern warfare. So, we’re responding to numerous opportunities right now for sales in NATO countries that are not currently engaged in fighting directly in the conflict in Ukraine; we’re looking at a fairly robust future for drones in the defense sector.”

Volatus provides the commercial and defense markets with integrated drone solutions. It uses a network of more than 1,200 contract pilots across the Americas, providing imaging and security, equipment sales, and support and training.

The company is also providing aerial surveillance and monitoring of oil and gas pipelines, a market Volatus executives believe is valued at US$58.4 billion.

Catalyst: Two New Acquisitions

Volatus may have taken another step toward cornering the market for monitoring the oil and gas pipeline market with its recent acquisition of Synergy Aviation. The company believes Synergy, based in Edmonton, Alberta, will strengthen its position to provide green drone technologies for oil and gas infrastructure monitoring as an alternative to less environmentally friendly helicopters and airplanes.

Volatus also completed an acquisition of iRed Remote Sensing of Emsworth, England, to reinforce the company’s ability in infrared inspection while expanding its presence in the UK and Europe.

Today, November 28, 2022, Volatus announced another acquisition, signing to annex Syracuse-based Empire Drone Company LLC. This company is known as one of North America’s burgeoning distributors and integrators for unmanned aerial systems. Empire Drone’s projected 2022 revenue is CA$2.5M with a 6% EBITDA margin.

With this acquisition, Volatus will purchase 100% of the company for a cash consideration of US$300,000, and equity of US$350,000 with a minimum floor price of $0.65. This includes, according to the company, “an earn-out of US$350,000 paid in equity after one year anniversary based on the 30-day volume weighted average price (VWAP) with a minimum floor price of US$0.65 per share and assume the long-term debt of US$225,000.”

Volatus Taking Off With Drone Sector

Global revenue from drones was valued at US$6.51 billion last year, expected to reach US$8.15 billion this year and jump to US$47.38 billion by 2029, according to a report by Fortune Business Insights.

While the report says drones will likely have several commercial applications, including medical emergency transportation, and filming and photography, it also concluded that a “rise in demand for unmanned systems in the oil and  gas, energy, and power generation sector is likely to fuel market growth in the upcoming years.”

“I believe it’s only a matter of time before it eventually hits US$5.00,” Volatus Investor Edward Vranic wrote.

In addition to its third-quarter record revenue growth, Volatus also reported a gross profit of CA$3.3 million, up from CA$2.6 million in the year-ago period. The company also reported a gross margin of 30%, an increase of 127 basis points over its second quarter of this year.

Volatus says its recent acquisitions of Synergy and iRed provide approximately US$7.5 million in proforma revenue and US$1 million in proforma EBITDA for the first nine months, boosting the company’s revenue to US$30 million with a proforma EBITDA of US$1.63 million for the same three quarters.

Volatus is also working to improve Beyond Visual Line of Sight (BVLOS), a technology that helps drone operators avoid collisions with other aircraft when their drones are out of visual range. Volatus is currently trading at US$0.30. But the company’s stock could see a dramatic rise as it continues to grow aggressively in multiple areas in the drone sector, wrote Edward Vranic, a Volatus investor, in his Canadian small-cap investment blog on Oct. 31.

“I believe it’s only a matter of time before it eventually hits US$5.00,” he wrote. “With that stock price increase coming from a mix of continued revenue growth, an ability to achieve cash flow positive operations within two years, and improved market sentiment leading to more aggressive valuation multiples. VOL is a thinly traded stock, and it won’t take much to send it into rocket ship emoji mode.”

Ownership and Share Structure

Top shareholders in the company include CEO Lynch with 26.62% or 38.46 million shares and Chairman of The Board of Directors and Hauge Court advisory member Ian Alexander McDougall with 27% or 39 million shares, according to the company.

It has a market cap of CA$36.18 million with 113.9 million shares outstanding, 36 million of them free-floating. It trades in a 52-week range of CA$0.89 and CA$0.23.

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1) Pete Barlas wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

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