Drone Budget Uptick Unlocks Opportunity
The Institute for Economics and Peace (IEP) just released its latest Global Peace Index, and the news isn’t particularly uplifting.
Over the last six years, the level of peace has deteriorated in 111 countries.
Even scarier, 500 million people live in countries with significant risks of violence, of which 200 million live below the poverty line.
Meanwhile, only 51 countries are enjoying increases in peace.
The most peaceful countries are Iceland, Denmark, and New Zealand.
Syria just replaced Afghanistan as the world’s least peaceful country.
Such a trend toward global violence is expensive, too, costing the world $9.8 trillion last year (roughly $1,350 per person).
For investors who can emotionally detach from all the conflict and chaos, though, a huge moneymaking opportunity just hit the radar screen.
Closer examination of the latest Index results yields something fascinating…
Armies, wars, and governments are no longer the biggest threats to peace.
Conflicts today are much more decentralized and local, like the Arab Spring and the recent emergence of ISIS.
This new data virtually assures that we’ll see further de-militarization around the world. Likely even at a faster pace than before.
So with less military, what will serve as the peacekeeper for the next 10 years?
Drone warfare is proliferating at such an incredible rate that pilots can’t keep up with the demands.
The number of drone pilots flying for the U.S. Air Force has more than tripled since 2008. And these pilots spend long shifts in stressful situations that oftentimes result in destroying targets, or even killing people.
This is leading to fears of burnout and exhaustion.
For proven military drones like the Predator, missions run 24 hours a day, 365 days a year.
Well, the military is working diligently to train new pilots.
Why? Because a ton of new drones are about to roll off the assembly line, with no end in sight.
Companies like AeroVironment, Inc. (AVAV) are still in the early stages of a historic boom – even though they’ve already doubled in price in the last two years. (AVAV has moved from $18 to $35.)
Here’s why I expect another 50% move before the end of winter…
In the recently released U.S. military budget, drone spending is set to increase dramatically next year.
In fact, 2015’s drone budget has over $59 million more than the 2014 budget.
It all points to a sizzling-hot, niche sector.
So while the trend toward more hyper-localized, civil unrest is definitely disturbing, I recommend biting on a few shares of the peacekeeper.
Onward and Upward,
Founder, Wall Street Daily