Perspectives on TASER

[Tifosi]

To all,

I was wondering if the members of the board would share their thoughts on TASR.

Here is a stock that has come crashing down to earth but perhaps it may re-gain part of its past glory. Probably not back to $30 but $15 would seem a possibility. Further, the daily volume looks interesting and it can become a momentum stock again.

Yes it does have some controversy, some of which has recently been disspelled, but it is a heavily shorted stock that may be susceptible to a short squeeze and the question remains has all the negativity been priced in?

While it is not a major brand, it is a brand to some degree and it seems that Europe is its next area of growth. The police force seem to love the product and it seems they have little major competition.

Your thoughts and insights are appreciated.

Tifosi

[Tifosi]

To all,

I truly appreciate the feedback that everyone has provided and I just wish to elaborate a bit further.

First, as stated by Henry, I do believe that the markets are going higher and I am trying to find those stocks that will rise based on the retail investor, not the professional investor. Why? Because the pro's have placed their bets and are investing more money on the dips. Sure Google can go higher but at $260, that is a lot of money for lots of 100 shares and the retail investor will go for the lower priced shares.

Of course, I do not see TASR having great earnings but how much more negativity is not yet priced in. I am not looking at this from a valuation perspective but from a growth and momentum perspective.

The two catalysts that I see taking the market higher are a late entry of the retail investor into equities and the expectation that most of the heavyweight Wall Street brokerages will be raising their estimates on the S&P 500 earnings. When that happens, we get an expansion in price-to-earnings multiples.

When the retail investor comes in he will be looking for the momentum play, such as TASR and SIRI and others.

TASR has come crashing down and the greater fool theory in me says that they will chase it up, as the company is bound to issue some good news given the trashing the stock has taken, the lack of competition along with the vested interest from the police force, be it in the USA or Europe.

The question remains is TASR a good stock to consider for the momentum. I am not crazy about SIRI as I believe that XMSR is the better play, yet SIRI keeps rising and has a valuation of $7.9 Billion with no profits versus $670 million for TASR.

Perhaps others will suggest other stocks to consider.

All suggestions are welcome.

[nodoodahs]

Between working in the house and yard, I'll be running down a shopping list from some value screens and digging at their 5-year statements - and taking some notes on the process. "I keep my eyes wide open all the time." Also trying to see if I can find some good bond appreciation / total return signals to play against my S&P timing signals. No big cookout or travel plans ..

[HenryTo]

Thanks for explaining where you're coming from. I think more retail investors out there should go through the exercise that you go through with your spouse!

As for tomorrow, I am going to arrive at work late and take off early. Bill, what do you have planned for this weekend?

Take care,

Henry

[nodoodahs]

Whoops!

You say "have a great weekend" like you don't have to work tomorrow?

In terms of keeping you (and me) honest, I just always like to explicitly separate different classes of investments. For example my wife & I have:

1. "hedge" position,
2. rental real estate
3. "value" equities for anticipated 1-3 year holdings
4. speculative positions

The hedge is currently gold, cash, some foreign currency funds, and BEARX.

The real estate is a fully paid off rental that we may 1031 into some shotgun shacks or mobile homes. It's not in a bubble market and where we live today isn't, either.

The value stocks, we may ditch those if the market gives us an "oh XXX" signal, but absent that, they are long term. I think this money will be fully invested in stocks 80+% of the time.

The speculative position we are looking at timing different classes of investments based on macro data, TA, etc.

So when someone posts a question like "Thoughts on [insert ticker here]", my first internal response is to categorize it as either "value buy and hold" or "speculative play."

[HenryTo]

Bill, please see my point number 4!

Thanks for keeping me honest! But that being said, there have been some good momentum plays (even plays that lasted a few years) even with likes of Xerox, Wang, and so forth at various points in history.

Have a great weekend!

Henry

[nodoodahs]

Honestly, not trying to be contrarian here, but from your article today:

I believe Professor Siegel's two major reasons are:

Investors have invariably paid too high a price for growth stocks or for the securities of a country that has been exhibiting higher-than-average growth. He has labeled this the “growth trap.”

Most upstart and innovative (e.g. “one-product companies” such as Xerox, Digital Equipment, etc.) companies invariably flame out. Investing in the “Asian Tigers” during the early to mid 1990s right before the Asian crisis is a prime country example.

I added the bolding. Sounds like TASR?

[HenryTo]

Tifosi,

We have recommended TASR as a speculative play before and we have made some money on it and sold before it came crashing down. FWIW, I think the negative hype is overdone and I think their products are fine and their market will continue to grow in the long-run. I will not be surprised if it regains some of its former glory and becomes a momentum stock again given all the negativity about the stock right now.

That being said, I've been having a lot of trouble with management moves in the last six months or so:

1) Huge insider selling, especially the huge sales by the Chairman during November of last year: http://finance.yahoo.com/q/it?s=TASR. It looks like after these sales, he owns no signficiant portion of the company anymore. That is a huge negative, IMHO.

2) Management spending huge sums (and unnecessary) of money on its new headquarters - complete with biometric door openers and what-not.

3) The continual use of press releases announcing new sales contracts in order to hype up its own shares. This is something I haven't seen since the days of the dot-com era.

4) The fact that the company became so successful with just one product actually works AGAINST the company. This is a historical fact - at least with U.S. businesses. Companies that became successful because of its business process or management team tend to outperform other companies in the long-run. A successful product only gets you so far if you don't have good management - and in this fickle world that we live in, it could be a very short time indeed!

Good luck with your investments!

Henry

[nodoodahs]

"How to play" is key because any move with TASR is speculative. This is not a stock worth holding for any length of time IMO.

The smack down from 30 to 11 was impressive and a "contrarian" indicator, but let's look at that 11 per share. It's about 10 times SALES. S&P average is what, 1.5-2.0? That 11 per share is 35 times EARNINGS. S&P average is what, 19-ish?