TASER International (TASR)
If I could name a single town that rose from obscurity in 2014 that would have to be Ferguson, MO. The Ferguson issue was as divisive as it was fascinating. There were so many issues at hand and the entire episode brought to the forefront many problems we have in this country today. If you’ve read any of my article or watched any of my videos you know that I don’t get into politics and I’m not about to change that here. But for those same people that read my writing, you know I’m about one thing; Making money.
So when I saw the world enamored with Ferguson I quickly began digging for gold. I thought to myself what, if anything this may change. Eventually I figured it may have an impact on the adoption of body cameras by police forces around the US. The leader in this field which likely will dominate this market is a familiar name and our Bull of the Day.
TASER is known for the less-lethal electric “stun gun” equipped by law enforcement. Their electric devices are used by over 780,000 officials in the US alone. These products help TASER bring in over $164 million in revenue each year. But TASER is entering the body camera arena with a new line of products for officers.
TASER already has an edge in this space because it has an existing relationship with precincts all around the US. It should be easy for them to lean on these relationships to introduce their body camera products. It’s a whole lot easier to leverage a current relationship with municipalities than it is to try and create one out of nowhere.
But the benefits potential revenue stream for TASER is beyond just the sale of body cameras. TASER is transforming itself and horizontally integrating itself by adding hosting services for the files the body cameras record. It’s released Evidence.com in order to provide an easy cloud-based hosting solution where officers can upload their files for safekeeping. This is a “sticky-money” approach for TASER and could potentially be a larger revenue stream than their current devices provide.
Analysts have taken note of the potential as well. If you look at earnings estimates for the current year, the consensus has risen from 33 cents to 41 cents over the last 90 days. The bullish stance is also evident in next year’s numbers with estimates rising from 44 cents to 50 cents over the same period. Add that to the fact that TASER has surprised earnings to the upside by an average of 4 cents or 71.39% over the previous 4 quarters and you have everything you need for a Zacks Rank #1 (Strong Buy).
From a technical standpoint, this latest sell-off in the market may have given us a perfect opportunity to load the boat. With a 52-week high at $27.65 TASR has sold off over the last several sessions. The sell-off has been strong enough to drop the stochastics back into neutral territory and cause the Commodity Channel Index to cross under the zero line. But the good news is we’re still tracking well above its 25×5 which is positively sloped. Yesterday’s intraday action saw a retrace to the upside of nearly $1 which may spell more strength today.
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