Taser International (TASR)
From Cabot Wealth Advisory 11/11/13 Sign up for Cabot Wealth Advisory—it's free!
All too frequently these days, when someone wants an example of a successful company that was a great investment, they trot out Apple (AAPL). Sure, Apple was a great success in the past decade, but people forget that Apple (originally named Apple Computer) struggled for more than a decade back in the 1990s, while IBM and Microsoft ruled the computing world.
Apple didn’t hit a home run until it began to revolutionize the music business with its iPod, and then used that as a springboard to create the iPhone. Yes, the company’s original products were good, but they did not serve the masses as well as the competition’s did. It was the company’s second and third business lines that served the masses and changed the world.
And now here’s another company that MIGHT be on the same trajectory.
You probably remember Taser (TASR). The company’s “conducted electrical weapons” (stun guns) were high profile a few years back. By causing neuromuscular incapacitation, Taser’s products help police officers control suspects, in the process reducing the use of firearms and reducing fatalities. Nevertheless, they are still controversial in some circles. While it’s legal to carry a Taser in 45 states, you can’t own them in Washington, D.C., Hawaii, New Jersey, New York, Massachusetts and Rhode Island.
Taser first made a big splash a decade ago. It came public in 2001, and by 2003, it was a hot stock, climbing higher as more and more people became aware of the company. Cabot Market Letter recommended the stock in November 2003 when it was reading at 60. In February, there was a three-for-one split, reducing the cost of our position to 20. And in April, after the stock had peaked at 128, and then sold off on heavy volume after an earnings report, we sold half, locking in a five-month profit of 296%! The remainder of the position was sold over the next four months, as the bulls and bears pulled TASR this way and that, but the top was in.
In the 10 years since, Taser’s revenues have nearly doubled, from $68 million to $115 million. The company has lost two product liability suits, but it’s continued to improve its products, which have helped law enforcement communities across the country do their jobs more safely.
Also, the company has fallen totally out of the limelight, which means it’s ready to rise again!
And Taser IS rising, thanks to its second act.
Here’s what Mike Cintolo wrote recently in Cabot Top Ten Trader.
“Taser International is the maker of the stun gun that’s used by military, police and a few civilian consumers as a non-lethal way to subdue attackers or fugitives. Sales growth was strong in 2006 and 2007, but fizzled out from 2008 through 2011. Taser needed to find a new product to augment its successful, but stagnant, lineup of electroshock weapons, and it looks like it has. The new product lines are 1) body cameras that will worn by police officers to record evidence and 2) a Cloud-based evidence management system called EVIDENCE.com that will collect evidence taken on cell phones, from photos to audio recordings to video interviews and manage it by category, case number and via automatic GPS tagging. The company’s Q3 earnings report on October 30 was much stronger than analysts had expected, showing a 43% jump in earnings per share on 22% growth in revenue. Sales of the company’s wearable cameras and EVIDENCE.com service soared 112%. Taser has always had a bit of a one-product perception problem, but its new products promise a more robust upside than just sales of Taser guns and subsequent sales of cartridges.”
In short, while Taser’s non-lethal weapons had, and still have, an image problem in some circles, the new product line, EVIDENCE, falls smack into the confluence of the security/surveillance/big data industries, where it’s all about making people safer, and no one gets hurt.
And the stock is once again hot!
TASR blasted off a base at 9 in August and just two weeks ago hit a high of 18, for a 100% gain. Right now it’s on a modest pullback, but I think there’s far more upside ahead, if Taser can execute, and get its story out to investors.
Mike, as usual, gave his readers some specific advice about buying, and if you’d like to see it, all you need to do is click here.
|Taser International (TASR)
17800 North 85th Street
Scottsdale, Arizona 85255
Index Membership: N/A
Sector: Industrial Goods
Industry: Aerospace/Defense Products & Services
Full Time Employees: 338