It’s raining government money here | Australian Markets

Three stuff you need to know in the present day…

1. Put DRO, EOS, ASB in your watchlist in the present day.

These are three small cap stocks with a brighter outlook than earlier than.

Why?

The Australian Financial Review stories that Peter Dutton’s latest transfer is to juice Australian defence spending. I doubt Albanese will squib on this, both, if he wins.

This follows on from the $1 trillion resulting from come out of the US, plus Germany going large on this entrance too.

For Australia, this might be an additional $21 billion flowing from taxpayers …however to the place?

DroneShield, EOS Systems and Austal are all ASX listed navy contractors. They have pretty much as good a probability as any of successful contracts here. Let me share one thing with you.

There’s a financial author within the USA referred to as Richard Maybury. He’s been recommending navy associated shares to his subscribers for 30 years.

The features are astronomical. That’s as a result of the US government has lavished money throughout the American navy for 3 many years.

Others are actually catching on to this straightforward strategy. Governments make struggle…and spend large to make it occur.

As it occurs…

DRO launched their quarterly numbers yesterday.

The market gave it a cross too. DRO is one of the few corporations that’s trading increased than earlier than ‘Liberation day’ crunched the ASX.

DroneShield has a market cap of $1 billion.

What did they are saying?

Revenue was $33 million for the quarter.

That’s the best quarterly quantity in company historical past. They are nicely on observe for his or her largest yr with dedicated orders closed to $100 million. There might be more to come back too.

They have almost $200 million in money after a large capital raise final yr. That’s more than enough to fund them for the meantime.

The catch is DRO doesn’t make large money.

Analysts project it making a modest $20 million in revenue for 2026. That places it on a Price to Earnings ratio of about 50.

That’s fairly wealthy. DRO sells {hardware} too – not well-known for great margins. This is to not say DRO can’t go increased. It went on a enormous, mad run final yr.

However, it’s extraordinarily depending on a continuous stream of contract wins. If they don’t materialise, the share may wither away badly.

That mentioned, we all know governments are showering the world in {dollars} for defence spending. So DRO has a probability, as do Austal and EOS to seize a good chunk of it. Three to watch certainly.

2. Congratulations to my colleague Brian Chu.

Brian was steadfast in his stance that gold stocks had been great shopping for all final yr.

Anyone who adopted his lead in his advisory The Australian Gold Report are reaping a staggering return.

The average gain throughout the portfolio is 153%.

That’s the facility of a commodity bull market at work.

The catch is you needed to have the center to back gold when it wasn’t clearly a great buy. Everything is simple in hindsight.

It’s truthful to say it’s all come collectively for gold and gold stocks.

Cost inflation is falling however geopolitical stress is up. The US greenback is getting dumped. There’s protected haven shopping for and speculators galore.

Either method, technique to go Brian!

3. Don’t neglect “digital gold”!

Here’s one thing to concentrate to. Bitcoin lately has correlated with the NASDAQ. You can bundle them up as risk on/tech performs.

Lately, the Nasdaq is getting knocked round, however bitcoin is up for the month.

The parlance for this in markets is “divergence”.

It doesn’t appear a coincidence that this occurring as gold rips up. That suggests bitcoin is trading, partly, like “digital gold”.

Bitcoin is a fascinating asset as a result of it embodies each risk on / risk off components.

That provides it a number of methods to repay over time.

I advised you yesterday my colleague James Altucher is seeking to surf this wave increased because it builds.

This Thursday, at 2pm Melbourne and Sydney time, he’s unleashing Project: Kill Bill.

Curious? Make sure you get on the precedence listing to see how the crypto market can doubtlessly serve your wealth building this yr.

As you’ll be able to see with Brian’s latest outcomes, when a market goes, it might actually go.

Best needs,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

We have skilled a wild experience just lately and the volatility is set to proceed whereas a lot uncertainty stays.

Remaining open minded and observant as costs fly round is important.

We can obtain hints in regards to the underlying energy of varied markets as we see them react to large volatility.

One such market that I’ve my eye on is copper.

It is one of the strongest commodities over the long-term and was testing its all-time high much less than a month in the past.

The tariff tantrum noticed copper plunge 25% in much less than two weeks. That is an unheard of degree of volatility for a commodity with such a deep market worldwide.

Fast ahead two weeks and copper has had an unimaginable bounce which noticed its price go from US$4.03/lb to the present degree of US$4.93/lb. That is simply 9% under the all-time high at US$5.37.

I might be to see how copper performs across the sell-zone of the wave created by the 25% correction (US$5.04-5.20/lb).

If copper jumps by means of that resistance we could also be close to a critical breakout to new all-time highs.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps