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Raven Industries: Small-Cap Agriculture, Balloon Technology Stock Cathie Wood Likes

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Chris Katje
·2 min read
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In October, ARK Investment CEO Cathie Wood started buying shares of small-cap Raven Industries (NASDAQ: RAVN), a technology company that helps agricultural, industrial and defense customers.

What Happened: Wood made purchases of Raven Industries for the Ark Autonomous & Robotics ETF (BATS: ARKQ) three days in a row in October.

The ETF holds a $5 million stake in Raven, representing around 0.5% of the fund’s assets.

Why It’s Important: Wood’s stake in Raven may be small, but could represent a belief from the fund manager in the future of the company. The Ark Autonomous ETF is up 88% in 2020. 

Raven Industries reported third-quarter earnings on Nov. 24. The company saw revenue increase 22% and 15% year-over-year, respectively, for its applied technology and Aerostar segments. The engineered films segment saw revenue fall 22% year-over-year.

The Aerostar segment saw record numbers for customer flight campaigns in the third quarter. This included the Department of Defense as a customer.

View more earnings on RAVN

This business segment also counts Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) as a customer for its Project Loon segment that launches balloons in the air to provide internet services to remote areas.

VentureBeat reported in October that a Project Loon flight set a stratospheric flight record when it was in air for 312 days. The Project Loon fleet includes 100 active balloons.

What’s Next: The company said the Aerostar division was gaining momentum and will grow substantially going forward.

Raven’s Thunderhead Balloon Systems have seen customer wins with Alphabet and the DoD and are now seeing others interested in the product. A recent investor presentation said the company is in active engagement with industry partners for new mission possibilities.

Aside from Aerostar, the agricultural segment is seeing strength from autonomy products and updates, which allow farmers near continuous harvesting.

Benzinga’s Take: Raven Industries is a small-cap company hitting on two growing markets with autonomous farming and balloon systems. Wood is a believer in the company and the third-quarter earnings show momentum ahead.

Shares of Raven Industries were down 4% to $25.36 on Monday. Shares are down 24% in 2020.

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