The stock market is littered with multi-baggers right now. Some stocks still have some room left. Drone Delivery Canada (TSXV:FLT) is probably my top pick for potential multi-bagger in 2021. Here’s why.
Drone delivery market potential
In 2020, online shopping adoption skyrocketed. Confined to their homes, people turned to e-commerce platforms like never before. This surge in traction has been clearly reflected in the top online shopping stocks. However, investors have overlooked the logistics that make this industry tick.
Billions of dollars and decades of experience have made the global supply chain remarkably efficient. However, the last-mile delivery system is still slow and archaic. Getting goods from the nearest distribution centre to your doorstep still takes far too long. Solving this bottleneck is critical for the next phase of growth in e-commerce.
Jeff Bezos seems to believe this bottleneck can be solved by commercial drones. He first mentioned this niche technology as a solution back in 2013. By 2017, his company had accumulated at least 64 drone technology-related patents. Last year, the company even received regulatory permissions to fly test drones.
In short, the world’s biggest tech company is serious about this sector that’s still flying under the radar.
Market size
Early research by Goldman Sachs suggests the market potential could be as big as US$100 billion (CA$130 billion). Meanwhile, startups in the sector are nearly all worth less than $1 billion today.
Drone Delivery Canada, for instance, is worth just $291 billion at its current market price. If the company can capture just 1% of the overall market over the next few years, the stock could be a serious multi-bagger.
Indeed, the company is already making serious progress.