OK VAN THIS IS IT!!! I RECENTLY BOUGHT DRAGANFLY DRONE..... AND NOW I REALIZE WHY I DID!!!-DFLYF>
Back on January 6th, the FAA added 12 members to the Drone Advisory Committee. It consisted of folks who, as traders, we should pay more attention to but often don't. Drones are set to become a bigger and bigger part of the commercial world and our day-to-day lives.
One name on the list did catch my eye on a second pass:
Molly Wilkinson. She's the VP of regulatory affairs at American Airlines (
AAL) , but I'm not looking at AAL stock here. They aren't much of a player in the drone world.
But if you check out the Draganfly (DFLYF) Advisory Board, you'll find her name as a member.
That tie is intriguing. Of course, it doesn't guarantee anything, but it never hurts to have a woman on the inside that can help steer the company in the most efficient direction.
It's worth noting as well that Draganfly announced two days ago it had begun the process for listing its common shares on the NASDAQ Capital Market. This would certainly help liquidity around the stock. Shares leaped on the news, now sitting considerably higher than when
I wrote about them just a few days agoon January 11, 2021. If you don't want to chase, there is a backdoor play open for longer-term investors that I mentioned on Monday. Stay tuned!
Draganfly: Drones and a Backdoor Play on Covid-19
If you're looking for an aggressive buy-and-hold in a sector in its infancy, there's a different way to play DFLYF if your time frame fits it.
By
TIMOTHY COLLINSJan 11, 2021 | 12:15 PM EST
Stocks quotes in this article:
DFLYF
I talk a lot about time frames. There's a simple explanation: they matter. In fact, they may be the most important deciding factor in not only what you trade but how you trade it. Where is your opportunity?
Let's take a look at Draganfly (
DFLYF) . This is a small drone company trading on the OTC. Honestly, that's oversimplifying it. Draganfly's business touches way more than drones in the traditional sense. Yes, it recently secured a new drone delivery patent for a vertical take-off and landing cargo delivery drone with variable center of gravity, so there still exists plenty of upside in the traditional sense. The timeframe on this will be longer though as drone delivery won't be on our doorstep, no pun intended, for months, if not years.
On the traditional front, it doesn't hurt that the U.S. Department of Agriculture selected Draganfly's Commander Ag-Pro drone for phenotyping, data collection, and data analysis.
But many don't realize this company is a backdoor play on Covid-19. The company has partnered with Varigard for Covid-19 disinfecting solutions. We've already seen Alabama State University and Battlefield Fight League (streaming partner of UFC) employ the use of drones plus disinfectant to help open up the world of sports again. The Alabama State Senate is also taking delivery of the Draganfly Vital Intelligence Smart Vital system which monitors (with voluntary consent) vital signs like temperature, heart rate, breathing rate, and blood oxygen content.
We're seeing new deals signed pretty much on a weekly basis right now.
But what if I told you that you could buy Draganfly shares for $0.47 right now and get a warrant to buy more shares at $0.71 as well. With shares trading north of a buck, it seems like a no-brainer, right?
That's where time frame comes into play. In order to buy shares at $0.47 plus get the warrant, an investor needs to be willing to hold the stock and warrant for at least nine months. There's no hedging or other arrangements that can be made unless you want to break a legal contract which no one should do.
Here's what this means. If you're playing the stock for the current momentum, this probably won't appeal to you, but how about if you bought the stock around $0.50 initially. Why wouldn't someone consider selling half, then using most of the profits to enter a deal like this? All one would be doing is using profits to rebuy the shares plus get a warrant with those profits. They would actually increase their position while decreasing capital at risk. At worst, they've increased their position size without increasing capital risk.
But there's a catch. Isn't there always? If you sold an existing position for a profit, you could owe taxes. That's why I mention using "most" of the profits. Set aside some for taxes if you have to do so. Also, there's the nine month hold. If you have liquidity needs, this wouldn't be a place you could go to get the liquidity you may need. Lastly, there's no guarantee the stock won't be below $0.47 over the next nine months.
My view of Draganfly has always been longer term. If the story interests you, I think the open offering is a no-brainer. The biggest challenge is I see fewer and fewer investors with a time horizon of hours or days so even talking about something in terms of months feels dirty and foreign. While this one falls into the highest risk category of investments, getting a 60% downside cushion is rare. Even more, the current intrinsic gain of the deal is $1.14. That's roughly equal to the current stock price! Obviously, that can go away, however, if you're looking for an aggressive buy-and-hold in a sector still in its infancy, there's a different way to play Draganfly if your time frame fits it.
