Electricity is one of those inventions that defines the modern world. While electrical energy has always existed in nature, through the awesome power of lightning storms, it was only relatively recently in human history that we were able to take raw materials like coal and burn it, in order to create and store the energy required to produce electricity.
This understanding and invention meant that a whole host of other things became possible, from the simplicity of the light bulb conceived by Thomas Edison, to the incredibly complexity of the probes the NASA sends to the outer reaches of the solar system.
However, there are always unintended and surprising uses to even the simplest technologies. For example, gunpowder was first invented to power fireworks, and was only later turn into a weapon for use in firearms. In the same way, electricity has become a weapon through inventions likes the Taser gun used by police forces and military worldwide.
This innovation and record of delivering has catapulted the Taser International (TASR) share price from lows of just above $10 in 2014 to recent highs well above $26.
The question for an option trading advisory service like Financial Markets Wizard is, is there still a way to create profitable online options trading strategies for TASR?
Understanding the Business
Taser International (TASR) is a company that supplies law enforcement and military authorities with effective, non-lethal weapons. The companies first product debuted in 1993, and was a simple electrical based “stun gun”. These weapons work by firing a cable connected to a charge point from a gun, rather than a bullet.
When the cable makes contact, it passes several thousand volts of electricity through the target, making them immobile and unable to run away or engage in actions that may threaten the community.
More recently, Taser has expanded into other aspects of policing, with the purchase of a company called AXON, which provides body mounted cameras. These cameras, similar to the wildly popular GoPro (GPRO) range of devices, are worn on the body by officers and designed to capture events during patrols.
The purpose is twofold: first, the officer is able to have a visual record of their activities to reinforce their reports, and second, it protects the community from heavy handed policing tactics by increasing officer accountability.
The company has another revenue stream from the acquisition of Evidence.com, which securely and remotely stores the video captured by officers on a contract basis, meaning that individual police departments do not have to undertake onerous data storage and security functions.
The company boasts over 16,000 police forces and private security organizations worldwide as clients, as well as a smaller personal user customer base that purchases Taser products for their own protection.
Metrics and Measures
Taser (TASR) is a company with a long history, but recent changes to the product and revenue mix have provided an important financial catalyst for growth, as shown by the most recent quarterly results.
The net sales reported by the company were $44.3 million for the quarter, which represented growth of 26% over the previous period. This was notable as it backed up the best growth in several years for the company. The sales were largely driven by electrical weapon sales, and helped by strong results from the international division, which reported an increase of $3 million.
The result that captured the attention of the market and stock advisory services, however, was the quarterly results of the Evidence.com and AXON divisions. Their total bookings increased to 15.3 million, which was a huge increase, almost tripling the previous corresponding quarterly result.
The other headline number from the report was the expansion of the gross margin from 62.8% to 64.7%, which was helped by better manufacturing efficiency as well as cost cutting in administration expenses.
The Investment Case
The investment case for Taser (TASR) is a strong one. Recent tragic events in the United States and the emotional reactions to them have shown that policing is dangerous work, and that citizens demand accountability from the police forces and governments of their areas.
Products like those provided by Taser can go a long way to providing this. Non-lethal weapons like Taser guns mean that law enforcement and security forces have a viable option for subduing violent offenders that isn’t as deadly as a hand gun. Similarly, the video recording devices and storage that Taser offers mean that there is greater transparency and accountability for law enforcement, and better evidence for investigators and the court system.
Counter-balancing this is the requirement for Taser’s relatively expensive equipment to be funded from already stretched municipal and state budgets, which have limited capacity for large-scale investment of this nature. However, offsetting this negative is the international market for Taser products, as well as the social desire among voters to fund measures that improve policing and crime prevention strategies.
Taser (TASR) is a classic case of a company that came to market with an innovation but then subsequently suffered from a plateau in demand. It has successfully addressed these issues with the addition of other devices and services which complement it’s existing products, and gives the company the opportunity to cross-sell and increase their revenue and profits. By taking the opportunity to learn options trading with a well-regarded option trading company like Financial Markets Wizard, you can learn how to profit from price movements in stocks like Taser International.