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TASR on a Tear — But Will Taser Short Out After a Great Run?

Taser International (TASR) has zapped up about 30% in two weeks in the latest push to new multiyear highs.

TASR stock — which banks largely on the stun guns of the same name, such as the Taser X26 or Taser C2 — is typically a sleepy stock with a market capitalization of about $500 million. But after staying rangebound for almost four years, TASR stock began to break out around Thanksgiving 2012 and has doubled in less than a year.

So can Taser keep this up?

Maybe. Taser continues to see large orders for new weapons and upgrades, mostly from law enforcement departments that view the device as a non-lethal tool for police. Recent orders, according to Taser itself via a press release, include:

  • Fayetteville Police Department, North Carolina: 200 X2s
  • Forsyth County Sheriff’s Office, North Carolina: 100 X2s, 100 Taser Cam HD recorders
  • Las Vegas Metro Police, Nevada: 174 X26P upgrades
  • Manatee County Sheriff’s Office, Florida: 100 X26P upgrades
  • Margate Police Department, Florida: 103 X2s upgrade
  • Rhode Island State Police, Rhode Island: 170 X26Ps
  • USDA Forest Service: 200 X26Ps upgrade
  • Unnamed U.S. law enforcement: 837 X2s (across two orders)

But it’s not just law enforcement buying Taser guns. In fact, personal sales of all self-defense gear, from stun guns to handguns, have been doing quite well in the last few years as consumers stock up. As a result, Sturm, Ruger & Co. (RGR) is up more than 600% in the past five years, and Smith & Wesson (SWHC) has tripled since 2010.

Whether it’s economic uncertainty or fear of stricter regulations in the wake of recent mass shootings is anybody’s guess as to why folks are buying more self-defense gear like Taser guns. But it’s certainly noteworthy, especially to TASR investors.

The million-dollar question, of course, is whether TASR stock can keep this up. It might be able to, in part because of products beyond simply TASR stun guns.

The company’s camera segment, for instance, continues to be undervalued and overlooked by investors. These wearable cameras, sold under the Axon brand, have big potential both as a way to keep police officers honest and to faithfully document honest law enforcement to prevent frivolous lawsuits. Most recently, the NYPD was ordered to employ wearable cameras after the controversial “stop and frisk” law was struck down.

It remains to be seen if this alone can lift Taser, but it’s worth watching TASR after this big run and the potential of its camera business.

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Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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