Three steps to analyse DroneShield, or other stocks you like

To answer that we've got to look deeper at the stock. And with just a little effort we see its share price pull back doesn't completely reflect whats happening with the company.

If you think you missed out on the 50% gain from its lows (Aug 7 to date), you may be in luck. The Technical indicators for the stock show that DroneShield could see a hair cut, remembering that global stocks usually fall in September. But it doesn't change the long term narrative for Droneshield – the artificial intelligence defence product manufacturer which has secured impressive contracts with global government organisations and NATO.

Despite the share price rising up off the August 2024 lows, the Indicator Sentiment on the moomoo platform swings to the ‘bearish’ side for DroneShield, after interpreting 12 technical indicators to make that conclusion.

This is just one of the AI-powered tools on moomoo you could use anytime to evaluate stocks of interest to you. I really like this particular tool because it uses a range of technical indicators, including my three preferred ones: moving average convergence divergence, relative strength index and moving averages.

Some people just use technical indicators to buy stocks. But I prefer to look at both technical and financial indicators. (In the case of DroneShield, today's technical sentiment is negative, but company data is not.) Combining both is a better way to analyse a stock (and according to Harvard University, doing so can help you outperform the market).

I also think looking at company fundamentals, especially its future, is of upmost importance. I mean you wouldn’t get on a ship unless you knew where it was going would you? So, I make it compulsory to review at least two financial indicators: a company's earnings per share and revenue estimates.

It's just two clicks on the moomoo app to get to that data, first find the stock and then click the 'Company' tab.) First, we can see how superior DroneShield's actual revenue was (from its last annual report), with revenue rising 105%. However, in line with DroneShield's share price pull back after its capital raising and issuing of new shares, its earnings-per-share (EPS) dropped 30%.

These cover DroneShield's earnings-per-share, revenue, and earnings before interest and tax (EBIT) – growth market estimates (or consensus estimates) for the next several financial years.

The positive picture these estimates show, are among many reasons I have been covering the stock for years. And earlier this year, I named DroneShield as a stock to watch. Which I still do.

These figures tell you a lot, but not everything. A further step I take when stock picking, is reading up on news and announcements from the company. This gives you a broader feel for the sentiment around a stock and tells the story behind the figures.

Digging around like this, gives you a valuable and solid feel for a company. In DroneShield's case we see why it's got such a healthy sales pipeline, with deals across the Asia Pacific and Europe (in particular NATO). While sales in the US account for most of its revenue.

Put all this information together and you’re starting to become your own stock analyst.

DroneShield is not only part of the defence spending industry push by NATO with the sector a a likely winner no matter which party takes control after the upcoming US election. While the company is also a winner of the artificial intelligence boom, with AI being an industry none of us can yet guess the breadth of, as the world marches forth with fourth industrial revolution.