If I'd put $5,000 into DroneShield shares just 1 year ago, here's what I'd have now

How good an investment has this tech company been?

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If I had invested $5,000 into DroneShield Ltd (ASX: DRO) shares a year ago, I would be laughing all the way to the bank now.

That's because during the last 12 months, the counter drone technology company's shares have been among the very best performers on the Australian share market.

To demonstrate just how successful an investment in DroneShield has been, let's take a look and see what a $5,000 investment a year ago would be worth now.

$5,000 invested in DroneShield shares

Investors that were savvy enough to invest into the company's shares in June 2023, would have been able to snap them up for 24 cents a piece.

This means that with $5,000 to invest, I would have been able to acquire approximately 20,833 shares in the high-flying share.

As of yesterday's close, DroneShield shares were changing hands for $1.37 each. This means that those 20,833 units now have a market value of $28,541.21.

That's a whopping return on investment of $23,541.21, which is almost five times your original outlay.

Why has it been such a good investment?

DroneShield's rise is not entirely surprising. In fact, I named it as one of my top ten ASX shares to buy in 2024 due to how well-positioned it is to benefit from the increasing demand for counterdrone systems.

In the company's annual report, its chairman summarised why demand is surging for its technology. Peter James said:

Drones and counterdrone systems are now used in every conflict globally, including the Ukraine war, Hamas attacks on Israel, Houthi attacks in the Red Sea, and most recently, the attacks on the U.S. bases in Jordan which killed 3 and injured over 30. Significant non-military use cases for drones continue for the intelligence community, airports, prisons, border security, stadiums, and other facilities. Nefarious use of drones is a global and rapidly rising threat, with DroneShield providing a proven market leading suite of solutions, directly and via its network of 70+ in-country partners globally.

DroneShield has also let its results do the talking for it. During the first quarter of FY 2024, the company's revenue increased 10x over the prior corresponding period to $16.4 million.

Since then, it has been able to raise $100 million from investors through a capital raising.

The proceeds from this will be used to capitalise on strong momentum experienced in the first quarter and favourable geopolitical environment. Management also noted that it has a sales pipeline of over $500 million, with over 90 qualified projects at different stages with high quality government customers.

All in all, it's no wonder that DroneShield shares are the talk of the town right now. Here's hoping its run can continue.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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