An interview Sunday night on CBS's 60 Minutes with
) CEO Jeff Bezos has created some stir when it comes to
Until last night there did not appear to be any link between
the online retailer and unmanned drones, but that has quickly
Bezos unveiled a small, unmanned drone that could be used to
deliver goods ordered on Amazon to customers within a 10-mile
radius of a fulfillment center. An item of ten pounds or less
could be delivered to front door of a customer thirty minutes
after it is ordered online.
mazon's Jeff Bezos Says Drone Delivery is
Even though it may seem like a story out of a sci-fi movie, it
may become reality sooner than anyone would have imagined.
According to Bloomberg, delivery drones are already being used by
a company in Australia to deliver textbooks. And a company in
Southern China is also experimenting with the new technology.
From an investment viewpoint the technologies used to create
the delivery drones is tied to aerospace and defense companies.
) is the closest thing to a pure play stock when it comes to
unmanned drones. The company manufactures drones as well as
charging stations for electric vehicles.
There are other big name defense companies that also are in
the drone business, including Boeing (NYSE:
). Last week the company's Insitu unit received an $8.8 million
contract from the Department of Defense for surveillance drones
used by the Navy and Marines.
A new ETF that has exposure to AVAV and a few defense
companies is the Robo-Stox Global Robotics & Automation ETF
). The ETF's third largest holding with an allocation of 2.7
percent is AVAV; BA is not held by the ETF.
ROBO is a basket of stocks that focuses on companies that
offer robotics as well as high tech automation. Another holding,
Elbit Systems (NASDAQ:
), an Israeli company that is a major player in the drone
business makes up 1.1 percent of the ETF. Since the ETF began
trading in late October it is up 2.5 percent.
Commerical Drone Industry Ready for Takeoff in
The iShares U.S. Aerospace & Defense Index ETF (NYSE:
) also boasts holdings of both AeroVironment and Boeing. The
difference with ITA versus ROBO is that ITA is heavily weighted
towards the big names in the defense sector. Boeing accounts for
nearly 10 percent of the allocation and is the ETF's largest
holding. On the other hand, AeroVironment is a small
holding with an allocation of only 0.8 percent.
Because the technology is fairly new and developing, there are
not a large number of companies that focus specifically on
drones. Investors interested in using an ETF to play the future
of drones in the military and delivering the next best selling
book should look to ROBO and possibly the defense options such as
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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