We bought DroneShield Ltd. (DRO:ASX; DRSHF:OTC) at good prices last year, having correctly calculated that the company had a bright future, and never sold it, but mostly lost interest this year when it ran off into a long correction that we can see to advantage on the latest 1-year chart below.
This advantage was largely due to a combination of a heavy funding and the company having to hang around waiting for big orders to come in.
Given what is going on in Eastern Europe and especially Ukraine and what the company manufactures, big orders look very likely soon, and the way that the stock has been behaving in recent days suggests that one or more may be just over the horizon.
Ordinarily, we would not be interested in chasing a stock that has risen quite a lot toward a zone of resistance (in the vicinity of its earlier highs in 2017 and 2019 and early this year that we can see on the 10-year chart below) and that has almost 600 million shares in issue, but the fact that the stock has been behaving like a young, dynamic stock in recent days implies that something big is in the offing, so the current strong upside momentum looks set to continue and may even accelerate.
The business environment for the company has been completely transformed over the past year or two due to the war in Ukraine, which NATO seems determined to continue and expand, and the resulting big demand for drones and related paraphernalia looks set to continue to grow rapidly.
We, therefore, stay long, and DroneShield is rated a Buy again here.
DroneShield's website.
DroneShield Ltd. closed at AU$0.375, $0.25 on January 19, 2023.
Originally published on clivemaund.com on July 19, 2023, at 7.50 pm EDT and July 20, 2023, at 9.50 am AEST.
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CliveMaund.com Disclosures
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
