The S&P/ASX 200 Index (ASX: XJO) has been on form in 2024. Since the start of the year, the benchmark index has risen almost 9.5%. And that doesn't include the dividends that have been paid out over the period.
But while that return is undoubtedly strong, it is nothing compared to what market darlings DroneShield Ltd (ASX: DRO) and Life360 Inc (ASX: 360) have achieved this year.
The counterdrone technology company's shares are up 175% this year, whereas the location technology company's shares have recorded a gain of 194%.
This means that investors buying their shares on the final trading day of 2023 would have almost tripled their money.
But those gains have been and gone. So, which ASX share is the best buy right now? Let's dig deeper into this.
Which ASX share is the best to buy?
The good news is that the team at Bell Potter believes that both ASX shares are great long term options for investors.
It has named them on its Australian equities panel this month. This panel is home to its favoured Australian equities that offer attractive risk-adjusted returns over the long term.
The broker notes that it considers the current macro-economic backdrop and investment environment when making its picks. It also focuses on quality companies with proven track records, strong management teams, and competitive advantages.
So, clearly there's a lot to like about both ASX shares. In respect to Droneshield, the broker said:
DroneShield is an Australian defence manufacturer specialising in counterdrone technology. Increased geopolitical tensions in the aftermath of the Russia/ Ukraine conflict and the Middle East have led to a global surge in defence spending. As a result, the defence industry, including companies like DRO, is witnessing significant growth and increased demand for their products and services. DRO has demonstrated strong earnings momentum, with CY23 revenue ($55.1m) increasing +228% YoY. We believe this momentum is likely to continue in CY24 based on a $28m contracted order backlog and $1.1b sales pipeline.
Bell Potter currently has a $1.35 price target on its shares. This implies potential upside of almost 29% for investors.
What about Life360 shares?
Bell Potter is very bullish on Life360. And while it rates the company's shares as a buy, it is worth noting that they have now rallied almost in line with its price target of $22.50. The broker recently said:
Life360 operates a market-leading app that provides communication, driving safety, and location-sharing features. With over 70 million monthly active users and 2 million paying circles, the company has significant growth potential as it continues to rapidly monetise its customer base, supporting a 12-month price target of $20.50 [now $22.50].
So, while both ASX shares are likely to be great long-term options for investors, at current prices Bell Potter is arguably likely to see Droneshield as the better pick.
