InvestMacro

Source: Streetwise Reports (4/2/24)

DroneShield Ltd. announced it has been awarded an AU$900,000 research and development contract by a Five Eyes government. Find out why one research firm names it one of the most important military AI companies. 

DroneShield Ltd. (DRO:ASX; DRSHF:OTC) announced it has been awarded an AU$900,000 research and development contract by a Five Eyes government.

The Five Eyes intelligence alliance was born out of the World War II era and includes Australia, Canada, New Zealand, the United Kingdom, and the United States.

DroneShield said the contract specifically aims to leverage the potential of the company’s DroneSentry-X Mk2 and provide a set of software tools to enhance end-user capabilities in the counter-unmanned aerial systems (C-UAS) domain.

“DroneShield’s radio frequency jamming capability has been recognized globally as highly effective in defeating nefarious drones,” DroneShield Chief Technical Officer Angus Bean said. “This new contract highlights that the DroneSentry-X Mk2 is a step-function in smart- jamming capabilities. We are looking forward to delivering on the capabilities the Defense users are looking for.”

The company said the contract “aligns closely” with its current technology roadmap. “Software controlled multi-channel wideband disruption allows for not only optimized channel management, frequency management, power usage, and optimization, but the addition of custom waveforms targeted at various threats,” DroneShield noted in a release.

One of the Most Important Military AI Companies

DroneShield provides C-UAS protection with a focus on radio frequency sensing, artificial intelligence (AI) machine learning, sensor fusion, electronic warfare, rapid prototyping, and MIL-SPEC manufacturing, the company’s website said.

Its technology uses “a multi-layered artificial intelligence-based solution for both detection and defeat, with smart, non-kinetic defeat.”

The company offers “protection against a wide range of improvised threats” through UAV (unmanned aerial vehicles), UGV (unmanned ground vehicles), USV (unmanned surface vehicles), and UUV (unmanned underwater vehicles).

Bell Potter analyst Daniel Laing gave the stock a Buy rating and an AU$0.90 per share price target.

DroneShield showed record results with its first profitable year in 2023, “with AU$9.3 million profit after tax.”

“DroneShield has had an outstanding last 12 months, which has been reflected in the share price performance YTD,” Bell Potter analyst Daniel Laing wrote in a research note on March 4. Laing gave the stock a Buy rating and an AU$0.90 per share price target.

McAlinden Research Partners has rated DroneShield as one of the most important military AI companies as defense orders outpace equipment losses in Ukraine.

The Catalyst: A ‘New Generation of Disruption Capabilities’

The new contract represents “the start of an entirely new generation of disruption capabilities,” DroneShield Chief Executive Officer Oleg Vornik said.

“DroneShield products are considered to be market leading by many governments around the world,” he continued. “We pride ourselves on setting the global benchmark.”

As drone protocols are designed to move away from RF interference and work in high-noise, high-clutter environments means that traditional disruption methods may become less effective. A software approach to stay one step ahead has become important to successful disruption systems, the company noted.

Technical Analyst Clive Maund wrote in 2023 that DroneShield looked “set to succeed.” In February, he wrote: “After starting higher again in November, it has advanced in a classic bullish staircase pattern, but over the past week or two the advance has accelerated dramatically with the price at last breaking out to new all-time highs, an impressive move given the number of shares in issue.”

Laing commented on DroneShield’s current sales pipeline of AU$510 million, with AU$388 million of potential orders this year.

“DRO’s confidence in the sales pipeline is reflected in its recent investment (committed supply chain payments of AU$30m) in its inventory balance, which we view as a leading indicator of near-term sales announcements,” Laing noted.

Darren Odell of Peloton Capital also predicted good things for DroneShield, writing in July 2023 that the company had “already exceeded 2023 revenue estimates.”

Ownership and Share Structure

Management and insiders own 11% of the company. CEO Oleg Vornik owns 2.23% of the company with 15 million options, on a fully diluted basis. Non-Executive Chairman Peter James owns 0.58% of the company with 920k shares and 3 million options, on a fully diluted basis, and Non-Executive Director Jethro Marks owns 0.22%, with 1.5 million options, on a fully diluted basis, according to DroneShield.

The company reports that the largest independent investor, Charles Goode, owns 4.41% of the company with 21.5 million shares, while strategic investors own a total of 13.99% of the company.

Eprius Inc. is the second largest shareholder, with 3.16% of the company with 18.5 million shares.

In its February 2023 placement, Droneshield said that it brought ten new institutional investors on board, but it has not yet released more details.

The company reports that there are about 616 million shares outstanding, and about 526 million free-float traded shares. Its market cap is about AU$499.37 million, and it trades in a 52-week range of AU$0.93 and AU$0.21.

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of DroneShield Ltd.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
3.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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“These things could get more intelligent than us”

By Elliott Wave International

The topic with all the buzz these days is Artificial Intelligence (AI) and its future.

The potential benefits include automating repetitive tasks, enhancing productivity, data analysis, assisting in medical applications — and more.

Then there’s the possible downside. Some of the major worries include the elimination of jobs, privacy violations, unclear legal regulations and the potential for AIs to go rogue as the goals of AI become misaligned with the goals of humans.

In an interview with NPR in 2023, computer scientist Geoffrey Hinton, who is known as the godfather of AI, said:

These things could get more intelligent than us and could decide to take over, and we need to worry now about how we prevent that happening.

However, right now, the mood surrounding AI is way more optimistic than pessimistic.

Just think about how investors have bid up the price of AI-related stock Nvidia Corp., which has a market capitalization of around $2 trillion. That’s more than the GDP of Australia or South Korea. Indeed, if Nvidia was a country, it would rank just outside the top ten largest economies on Earth.

Yet — a word of caution: Trends generally don’t go up or down in straight lines without significant interruptions.

Indeed, the March Global Rates & Money Flows, one of Elliott Wave International’s newest services, which covers global fixed income markets, stocks, currencies and more, shows this chart of an AI exchange-traded fund and says:

BOTZ, the ticker for the Global X Robotics & Artificial Intelligence ETF, sports a clear five-wave decline from 2021 to 2022. Since then, a corrective rally appears to be in operation with wave C advancing now. … [The] evidence suggests that the AI revolution may be off to a false start.

But what about the price pattern of Nvidia? — you may ask.

Know that our Senior Global Strategist, Murray Gunn, also provides Elliott wave analysis of Nvidia in the March Global Rates & Money Flows.

If you’re unfamiliar with Elliott wave analysis, read Frost & Prechter’s definitive text on the topic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from this Wall Street classic:

Despite the fact that many analysts do not treat it as such, the Wave Principle is by all means an objective study, or as [Charles] Collins put it, “a disciplined form of technical analysis.” [Hamilton] Bolton used to say that one of the hardest things he had to learn was to believe what he saw. If you do not believe what you see, you are likely to read into your analysis what you think should be there for some other reason. At this point, your count becomes subjective and worthless.

How can you remain objective in a world of uncertainty? It is not difficult once you understand the proper goal of your analysis.

Without Elliott, there appear to be an infinite number of possibilities for market action. What the Wave Principle provides is a means of first limiting the possibilities and then ordering the relative probabilities of possible future market paths. Elliott’s highly specific rules reduce the number of valid alternatives to a minimum.

If you’d like to learn about the “highly specific rules” of the Wave Principle, know that you can gain complimentary access to the entire online version of Elliott Wave Principle: Key to Market Behavior for free.

Just follow the link and you can have the Wall Street bestseller on your computer in moments: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

By ForexTime 

• FXTM launches 6 new stock indices
• NETH25 gaining more than Gold, US stock indices so far in 2024
• NETH25 tracks 25 largest and most-traded Dutch stocks
• NETH25 index includes ASML – Europe’s most-valuable tech company
• Experts predict this stock index could rise another 8.6% in 12 months

FXTM’s new NETH25 stock index has been on an unrelenting search for new record highs!

The current ATH (all-time high) for this stock index stands at 879.3, posted yesterday (Monday, March 25th).

NOTE: 11 of the 18 different stock indices offered across FXTM’s platforms have posted record highs respectively so far in 2024!

Although the uptrend is on a pause at the time of writing,

the NETH25 index is still up by about 11.5% so far this year!

The NETH25’s index’s year-to-date gains have outperformed those of other popular assets:

• NAS100 stock index: +8.6%
• Gold: +5.3%
• US Dollar index: +2.8%

What is a stock index?

Imagine a stock index being a basket of many different stocks.

The index measures the overall performance of those stocks inside that “basket”.

What does the NETH25 stock index track?

FXTMs NETH25 stock index tracks the performance of the AEX index – the Amsterdam Exchange index.

The AEX index measures the overall performance of the 25 biggest and most actively traded shares on Euronext Amsterdam.

The AEX index includes well-known companies such as ASML, Shell, Unilever, ING, Universal Music Group, and Heineken, among others.

FUN FACT: The Amsterdam Stock Exchange is generally considered to be the oldest stock exchange in the world, established in 1602.

3 key things to know about the NETH25 index:

1) NETH25 is a tech-heavy stock index

Tech stocks account for over 25% of the AEX index, led by ASML – Europe’s most-valuable tech company.

Note how tech companies leading the charge upwards for many stock markets around the world, from Nvidia in the US, to Taiwan Semiconductor Manufacturing in Taiwan.

In similar fashion, the NETH25 index is also soaring upwards thanks to the ongoing AI-mania which is bolstering demand for semiconductors.

2) NETH25 battling for 2nd-best performing FXTM stock index so far in 2024

Here are the top-5 biggest gainers of the 18 stock indices offered across FXTM’s platforms:

1. JAP225: +20.7%
2. EU50: 11.6%
3. NETH25: 11.5%
4. TWN: +9.7%
5. US500: 9.4%

9 of the AEX Index’s 25 member stocks have already posted double-digit year-to-date gains, which is helping the NETH25 keep pace with the overall surge in global stock indices.

3) NETH25 index forecasted to climb another 8.6% over next 12 months

Over the next 12 months, the AEX index is expected by expert financial analysts to cross over the 950 level.

If so, that marks 8.6% in potential gains, with a further upside of 76 index points.

Of course, markets hardly ever move in a straight line, and there are bound to be twists and turns along the way, presenting trading opportunities for both buyers and sellers.

Still, over the longer-term horizon, as long as a AI-mania can keep chugging along, bolstered further by a rosier outlook for the European economy, thanks to incoming rate cuts by the European Central Bank …

that should enable the NETH25 index to post multiple new record highs along the way.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Here are details of “The Great Cash-Out”

By Elliott Wave International

Corporate insiders may sell the shares of their company for any number of reasons but one of them is not because they think the price is going up.

In other words, insider selling can serve as a warning.

For example, the January 2022 Elliott Wave Financial Forecast, a monthly publication which covers major U.S. financial markets, noted:

Only one group is selling. … Corporate insiders sold a record $64.5 billion of their firms’ shares through November [2021]. As the December [2021] Theorist noted, insiders “know what their companies are worth,” and “they’ve been selling their heads off.”

This commentary was published within days of the January 2022 highs in the Dow Industrials and S&P 500.

What does all this have to do with today?

You guessed it, insiders are in a selling mood again.

Here are just a few prominent examples:

In the last two months of 2023, Mark Zuckerberg, the executive chairman of Meta Platforms (Facebook), sold $400 million worth of Meta stock. He then sold another $661 million between January 31 and February 21.

Around this time, on Jan. 20, Bloomberg noted:

… a total of 1,000 insiders sold their own stock and 128 bought shares, leaving the sell-to-buy ratio poised for the highest monthly reading in data going back to 1988.

Then, on Feb. 27, we had this headline from Fortune:

The Great Cash-Out: Jeff Bezos, Leon Black, Jamie Dimon, and the Walton family have now sold a combined $11 billion in company stock this month …

JPMorgan CEO Jamie Dimon and Apollo Global Management co-founder Leon Black sold shares in their companies for the first time ever.

The Walton family unloaded $1.5 billion of Walmart shares and Jeff Bezos sold $8.5 billion of Amazon stock.

Also of note are the stock market activities of another very rich person — or shall I say the lack of activities.

Warren Buffet of Berkshire Hathaway is holding onto a record high stockpile of cash: $167.7 billion. The Oracle of Omaha says he sees “no candidates for capital deployment.”

Of course, major corporate insider selling is by no means the only indicator investors should watch.

Market participants may also want to monitor the repetitive patterns of investor psychology — which show up as Elliott waves on price charts.

If you’d like to delve into the details of Elliott wave analysis, read Frost & Prechter’s definitive text on the subject — Elliott Wave Principle: Key to Market Behavior. Here’s a quote from this Wall Street classic:

It is a thrilling experience to pinpoint a turn, and the Wave Principle is the only approach that can occasionally provide the opportunity to do so.

The ability to identify such junctures is remarkable enough, but the Wave Principle is the only method of analysis that also provides guidelines for forecasting. Many of these guidelines are specific and can occasionally yield stunningly precise results.

Get more insights into the Wave Principle by reading the entire online version of the book for free.

Just follow the link and you can have the Wall Street bestseller on your computer screen in moments: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By ForexTime

• FXTM launches brand new SG20 stock index
• SG20 has highest dividend yield of all FXTM stock indices
• SG20: most stable Asian stock index within FXTM universe
• SG20 has strong positive correlation with spot gold
• Wall Street forecasts that this stock index could rise by another 14%

FXTM’s new SG20 index may be enticing for range traders who enjoy consistent cash payouts.

What is a stock index?

Imagine a stock index being a basket of many different stocks.

The index measures the overall performance of those stocks inside that “basket”.

What does the SG20 stock index track?

FXTMs SG20 stock index tracks the performance of the MSCI Singapore Index.

Note that this MSCI Singapore index is not the same as the benchmark Straits Times index, which is maintained by the FTSE.

This MSCI Singapore index aims to capture the overall performance of 22 different large- and mid-cap stocks in Singapore.

Together, those 22 stocks make up about 85% of the entire Singaporean stock market.

3 key things to know about the SG20 index:

1) Singaporean banks are the largest members of this index

Singapore is a city-state that is also known for its status as a “safe haven”, especially for the Asian region.

As a result, its financial sector tends to attract outsized fund inflows, benefitting its banks.

No surprise then that DBS Group, OBCB Bank, and UOB, combine to make up nearly half (48.17%) of the entire SG20 index.

2) Least volatile Asian stock index within FXTM universe

Of the 6 different Asian stock indices, the SG20 index has the lowest 30-day volatility figure, as of today (Tuesday, March 19th).

• SDG20: 10.9
• TWN: 13.2
• JP225: 15.8
• CN50: 17.1
• HK50: 23.6
• CHINAH: 27.5

Here are more data points to showcase the SG20 index’s relative stability:

• SG20 index is faring better than Singapore’s benchmark Straits Times index

The SG20 index is up 1.25% so far in 2024.

Compare that to Singapore’s benchmark stock index (FTSE Straits Times index), which has dropped by by more than 2% so far in 2024.

While the performance of Singaporean stocks are in stark contrast to the many stock indices around the world that have printed fresh record highs this year …

SG20 index appears to putting in a relatively steady shift so far this year.
 

• SG20 index has a strong correlation with gold

To buffer the notion of Singapore as a “safe haven”, this SG20 index tends to mirror the performance of another famed “safe haven” asset: gold.

Over any given 5-day period from the past 20 years, both XAUUSD (gold) and this SG20 index have moved in the same direction 51% of the time (positive correlation.

NOTE: According to Bloomberg data, gold and SG20 have a positive correlation of 0.51, over a rolling 5-day period from the past 20 years. A number of 0.5 or higher indicates a strong correlation.

3) SG20 has highest dividend yield of all FXTM Stock Indices

Over the past 12 months, this SG20 index has paid out a dividend yield of 4.7% (based on current prices).

That’s significantly higher than the dividend yields currently offered by other popular stock indices (based on current prices):

• UK100: 4%
• EU50: 2.9%
• JP225: 1.6%
• US500: 1.4%
• NAS100: 0.8%

But wait, there’s more!

Over the next 12 months, Wall Street analysts forecast that members of the SG20 index will pay out EVEN MORE dividends.

This is expected to bring the forward 12-month yield up to 4.9%.

What is a “dividend yield”?

Dividend yield is a % number representing how much money an investor gets for buying and holding an asset.

The higher the yield, the more dividends the investor receives, as a ratio of what was originally invested.

Dividends are cash rewards that are given by companies (in this case, companies that are included in the SG20 index) to its shareholders.

Hence, holders of assets linked to the SG20 index, such as Exchange-Traded Funds (ETF) or even Contracts for Differences (CFD), often are entitled to similar dividends as well.

Where’s SG20 headed next?

Over the next 12 months, Wall Street analysts predict this SG20 index could return to the 330 mark.

From current prices, this implies about 14% in potential gains.

For proper context, a number around 330 would only restore the SG20 index to levels not seen since 2022.

That would still pale in comparison to the SG20 index’s all-time intraday high of 481.23 posted 10th October 2007, before the Global Financial Crisis.

SG20 bulls (those hoping that prices will rise) will be hoping that the Asian “safe haven” economy can continue registering steady growth, benefitting the city-state’s financial sector along the way.

If such an outlook proves true, then …

Traders and investors may yet enjoy more gains amid less-volatile prices, while collecting healthy dividends along the way.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com