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Three things you need to know about DroneShield
DroneShield $Droneshield Ltd (DRO.AU)$ is the biggest defence stock in Australia. It's one of the best performing stocks on the ASX over the last 12 months. Yet if you analysed the company (which you can do on moomoo's platform); and know what it is building, and know who it's in discussions with, then you might think DroneShield could maybe be flying under the radar for long term investors.
Yesterday afternoon I went to DroneShield's headquarters and got to know the company a bit better after sitting down with Oleg. I share three major takeaways with you, below. For more, I encourage you to WATCH the recent video in depth discussion with DroneShield CEO and founder Ole Vornik so you can get to to know the business.
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Firstly know - The business is a bit complex—it's a defence company (an ethical one with anti-drone technology, government contracts, and it uses AI). Most of its revenue from drone jamming technology - under contract with US government agencies. It has three families of products, and it's growing its revenue. It's now become the biggest defence company in Australia. It's a top-performing stock despite its shares pulllig back. So while it's known in some trading and investing circles, it is not covered by many investment houses. And it's not in the ASX200 or the ASX300 (potentially yet). See below for more.
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Secondly - Its contract wins are likely to grow, based on the company's discussions
· 75% of revenue is from US government organizations. They have yet to win any Australian government contracts (they have only provided aid to Ukraine via $10 million funding from the Australian government).
· Remember earnings growth drives share price growth. I think there is more earnings upside ahead if you are long term investor and believe they will continue to grow within other US Government departments. If listen to the interview https://www.youtube.com/watch?v=kfG_WansGcUOleg tells us that once you are trusted by a US Government organisation, that level of trust grows. Meaning, another US government departments or organisations tend to likely to trust that other US US Govt' Organization/ department - meaing the breadth of contracts could grow with the US Govt'. Oleg also says contracts are likely to roll on, just like they do with other defense comapnyes (and he compared the scenario to Lockheed Martin and Raytheon).
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Thirdly - it looks like DRO could be added to the ASX300 as it's now the 247th biggest company on the ASX
· DRO is not yet officially in the index. But once it's in the pin-up index, things could change for DRO. Remember how I called out UBER $Uber Technologies (UBER.US)$ saying it would probably be added to the S&P500. And then remember how its shares took off before and after being added to the S&P500? We generally can see a company is going to be added to a key index before it gets tapped on the shoulder by S&P Dow Jones Indices, simply by looking at its market cap growth and where it is compared to other stocks in the index, and by looking at revenue growth.
· You might expect S&P Dow Jones Indices to add DroneShield to its ASX300 index. Look out for an announcement by S&P Dow Jones Indices potentially in the coming days or weeks. That's according to Oleg and what I can see based on its market cap, with the company now being the 247th biggest company in Australia and it could see overtake Star $The Star Entertainment Group Ltd (SGR.AU)$ in value.
· Rebalancing usually occurs in the third week of the month. Then after that, institutions usually balance their portfolios by / at the end of the quarter. This means super funds and ETFs will typically stocks added and sell stocks being removed from key indicies. Meaning you might expect buying of DRO's to pick up, - that is assuming it will be added to the ASX300.
· Rebalancing usually occurs in the third week of the month. Then after that, institutions usually balance their portfolios by / at the end of the quarter. This means super funds and ETFs will typically stocks added and sell stocks being removed from key indicies. Meaning you might expect buying of DRO's to pick up, - that is assuming it will be added to the ASX300.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Jessica Amir
Moomoo Official Market Strategist
moomoo, market strategist.
Seen/heard on Fox News Business, ABC, SBS, Reuters wires.
Investor/Trader.
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SnowVested : I know how the tech side of new air warfare and Guerilla tactics are going, thanks to certain shows, the issues tiwian coast line has with China, the biggest talked about use in the Ukraine war fare.
how we will soon need it more then peeps may think in the next few years.
-exploring new places, underground above the trees or on other planets even.
to home defense deployable units to record visuals till the authorities show up. ect ect ect
I came across Dronesheild, look at its site, it's backers as any one else can, and brought at $1 watched the CEO's sell off all their stocks and landed back at the same point.
DRO is my only current non-franked or div stock, and sadly, I not real established on the gross profit selling laws outside that the Gov, will want half of the earnings? :(
SnowVested : and that tech crew, if you ever see this XD not likely.
keep up the great work to look after those that look after each other and their countries.
one day.. hopefully even be affordable for the 'domestic' market