Let’s take a look at Taser International (TASR).

I know everyone has heard the name before. Even before the flare up in Ferguson, Missouri I liked this company a lot, but the tension and violence underscore the value proposition for investors, police departments and society at large.

The company says 129,000 lives have been saved because of the deployment of Tasers. A new camera product is offered on the company’s website called EVIDENCE.com. In one study alone, a police department said it brought citizen complaints down 88%, and the use of violence down by 59%. In the most recent completed quarter, bookings for that camera and website came in at $11 million, up more than the two previous quarters combined and $2 million a year earlier. This thing is starting to catch fire.

It's also making nice in-roads around the world, especially strong are UK, Australia, Korea and Singapore. Gross margins edged to 62.4% from 61.4%, the Taser X26P saw sales leap up 126%. Talk about contracts, this month alone Fresno ordered 100 cameras with a subscription, Houston ordered 5,400 tasers. More orders from Burlington, Vermont; Cullman, Alabama and Flagstaff, Arizona. I've been disappointed in the stock this year, but still think it should change hands north of $20.

And now let’s talk about Fleetmatics (FLTX).

The company provides software-as-a-service, which monitors data from fleet drivers. Most of their business is small and medium sized businesses, Fleetmatics shows them how to save money on everything.

Already a very successful story, the company has been growing big time. From 2,200 subscribers in the first quarter of 2005 to 472,000 today. That’s absolutely huge, and the upside just continues from here. Huge potential.

It’s a very fragmented industry, 97% of business fleets have less than 1,000 vehicles. The size of the market is 31 million in geographies across the world (UK, Ireland), and the company has already made penetration in most of these places. There are another 35 million vehicles in places they haven’t gone yet (the rest of Europe and Latin America).

If you’re an owner for these businesses, you lower fuel cost, have fewer people on payrolls and much better productivity. In fact, in one case study the monthly return on investment was 18 to 1. Additional features will include fuel card, driver style, Garmin, and driver logs - along with panoramic views, post speeds and monitoring dashboards and alerts.

In the most recent quarter, gross margin was 76% from 65% in 2005. The company’s goal is 80%. Margins expand…stocks go up. Recently we saw a real nice reversal on the charts on the cusp of major breakout through $35, I’m thinking this bad boy goes to $43 very quickly.

DISCLOSURES

Micron Technology (MU)

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CHARLES N N Y N
JIM N N N N
MATT N N N N
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JOANIE N N N N
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Fleetmatics (FLTX)

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CHARLES N N Y N
TRACY N N N N
MATT N N N N
JOANIE N N N N
JIM N N N N

 

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