Taking Flight: Bats, Birds and My Favorite Defense Stock
As you know, I’m always on the lookout for compelling new technologies. And lately, my research keeps drumming up opportunities in – no joke – the animal kingdom.
You’ll recall, a few weeks ago we shared a video on how scientists are studying the helicopter-like turns made by pigeons for possible applications in the next generation of unmanned aircraft.
Well, today I have two more animal videos to share…
The first reveals the secrets of swarming bats and how their ability to dart and dive – without colliding – could be used in military applications. The second video takes us from theory to application. It shows a man-made hummingbird that can be used for high-tech spying.
Don’t worry, though. This article isn’t just about birds and bats. At the end of it, I also share a compelling investment opportunity in the defense sector. Even in the wake of President Obama’s plan to cut more than $450 billion from the defense budget over the next 10 years, this company is positioned to prosper.
So, in the words of the great sportscaster, Warner Wolf, “Let’s go to the videotape!” Then we’ll move on to what you really want – a timely investment opportunity.
The “Batcopter” Takes Flight
A research team at Boston University designed a “Batcopter” to study how bats manage to fly together but never collide. They’re testing it in the desert of southern Texas, where thousands of Brazilian free-tailed bats swarm from their caves to feed each night.
As Dr. John Baillieul, professor of mechanical engineering at Boston University, says, “Getting some understanding of how they’re positioned relative to one another and how they may change within the formation as they fly is an open question in biology and it’s also very interesting for people who are trying to engineer flight systems for swarms of unmanned vehicles.”
The Best Invention of 2011
In collaboration with the U.S. Defense Department, the Nano-hummingbird (the first unmanned aircraft of its kind) was created for warfare – specifically, for spying.
It can hover, fly backwards and remain stable in high winds. It can maneuver with precision and speed unlike any other unmanned aerial vehicle. And it’s equipped with a video camera and live streaming capability, allowing its operators to see what it does from up to a kilometer away.
It’s so impressive that the Nano-Hummingbird earned a 2011 Breakthrough Award from Popular Mechanics. Plus, Time magazine named it one of the best inventions of 2011.
Defense Could Be Our Best Offense
It turns out that the maker of the Nano-hummingbird is a publicly traded company, AeroVironment (Nasdaq: AVAV). And although it doesn’t generate revenue from the new drone yet (it’s still a prototype), the company does generate a significant amount of sales – over $330 million in the last year – for its other unmanned aircraft.
Despite competing against industry giants like General Atomics and Northrop Grumman (NYSE: NOC), the $652 million market cap, AeroVironment, produces 85% of the unmanned aerial systems used by U.S. forces in Iraq and Afghanistan, according to the Defense Department.
Of course, fears over massive cuts to defense spending have spooked many investors out of defense-related companies. But don’t let that keep you from considering AeroVironment. As this graphic from The Economist reveals, research and spending on unmanned aircraft systems is significant and expected to increase.
Not to mention, former Defense Secretary, Robert Gates, “went out of his way to exempt drones from future [defense] cuts.”
Bottom line: Even the animal kingdom can help us uncover investment opportunities. And AeroVironment serves as one notable (and timely) example.
Ahead of the tape,