A Drone Aircraft Play On Recent FAA Ruling

Drone aircraft could see a lift from a new FAA ruling allowing routine civilian flights, and AeroVironment was one way to play it.

“This is a company that’s trading at 7 percent discount to large-cap defense names, but it’s got growth,” trader Joe Terranova said Monday.

Terranova noted that analysts had lowered guidance for 2012, but he still thought the stock was cheap considering a big potential catalyst.

“One thing it has more than anything else, it’s the potential to be bought and taken over,” he said. “I think the stock stabilizes here, around $25 to $30.”

In a “Fast Money” interview, AeroVironment CEO Timothy Conver said the company supplied 85 percent of the drone aircraft used by the Pentagon.

The company’s product line includes aircraft starting at a one-pound airplane, which might be used for surveillance by police forces or the military, to much larger models.

“That allows them to know what they’re getting into, move faster and be much more effective, and we think similar opportunities will be available for public safety applications in the country,” he said.

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Trader disclosure: On March 12, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long NXPI; Terranova is long IBM; Terranova is long MCD; Terranova is long EMC; Terranova is long MSFT; Terranova is long GS; Terranova is long JOY; Terranova is long OXY; Terranova is long LQD; Terranova is short GOOG; Terranova is short April Gold futures; Terranova is short May Silver futures; Adami is long C; Adami is long GS; Adami is long INTC; Adami is long AGU; Adami is long NUE; Adami is long BTU; Najarian is long AAPL call spreads; Najarian is long GS call spreads; Najarian is long IBM call spreads; Najarian is long WNR call spreads; Najarian is long RIG call spreads; Najarian is long WDC call spreads; Najarian is long CCL call spreads; Najarian is long HTZ call spreads; Nations is long C; Nations is long BAC;

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