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Friday, November 27, 2020

The Roller Coaster Ride Continues for Drone USA Inc (OTCMKTS: DRUS)

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The action in Drone USA Inc (OTCMKTS: DRUS) is interesting in the manner that a roller coaster is interesting. The stock initially exploded higher a couple weeks ago on reports that the company had just announced that its subsidiary, Howco Distributing Co, was awarded a three year 1.7 million dollar contract from the US Government’s Defense Logistics Agency with an option to extend for an additional two years for trailer support components.

To follow that up, the company just announced that Howco Distributing increased its contract award win rate by 449% through its Labor of Love Customer Relations Model. The stock has thus far reacted positively, but still has work in front of it to make up for lost ground following the initial announcement a couple weeks ago. It will be very interesting to watch how this story evolves from here.

Drone USA Inc (OTCMKTS: DRUS) casts itself as a company that focuses on the research, design, development, testing, manufacture, distribution, export, and integration of advanced low altitude unmanned aerial vehicles systems, services, and products. It offers quadcopter and fixed-wing unmanned aerial vehicles to government and commercial markets.

The company, through its subsidiary, HowCo Distributing Co., also provides product procurement, distribution, and logistics services to the United States Department of Defense and Defense Logistics Agency. In addition, it provides drone operator training services; and licensed piloted services, such as search and rescue, utility inspection, real estate marketing, construction, engineering, and agriculture. Further, the company offers spare and replacement parts to various federal government agencies, the U.S. military prime contractors, and commercial customers worldwide.

Drone USA, Inc. is headquartered in West Haven, Connecticut.

According to company materials, “Headquartered at 16 Hamilton Street, West Haven CT, Drone USA is everything drone for U.S. Law Enforcement, Fire Fighters, U.S, Industry and the U.S. Government… Drone USA, Inc. (OTCQB: DRUS), headquartered in West Have, CT., is a service provider, manufacturer and reseller of drones and distributor of products to the U.S. Government. Our competitive advantage stems from offering superior service, high quality products and establishing and maintaining life-long customer friendships. Our primary markets U.S. police, firemen, U.S. industry and the U.S. Government.”

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We’ve witnessed 7% added to share values of the name over the past month of action, a bounce that has taken root amid largely bearish action over the larger time frame. In addition, the name has witnessed a pop in interest, as transaction volume levels have recently pushed 820% over what the stock has registered over the longer term.

Michael Bannon, Drone USA’s Chief Executive Officer, commented, “I couldn’t be prouder of our Howco team. In the late 1980s when my father started our family business, he taught me an important lesson. He said, “when a customer calls us they have a problem, their problem travels over the phone line and into our office. Their problem is now our problem. We solve it and it never goes back to the customer.” That idea is so central to what Lindsay has coined as our Labor of Love Customer Relations Model. We make our customer’s jobs easier by solving their problems.”

Earning a current market cap value of $880K, DRUS has virtually no cash on the books, which compares with about $10.6M in total current liabilities. One should also note that debt has been growing over recent quarters. DRUS is pulling in trailing 12-month revenues of $21M. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling at -18.1%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $DRUS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $DRUS, either long or short, and we have not been compensated for this article.

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