We start another week of trading stock options today as we embark on an exploration of possibilities of relatively unknown; yet, high-profile companies. Today, we start with the options of TASER International, Inc. (NASDAQ:TASR). TASER International with its market capitalization of $1.26B is engaged in the development, manufacture and sale of electronic control devices (ECDs) designed for use in the law enforcement, military, corrections, private security and personal defense markets.
Federal, state and local law enforcement agencies in the United States and globally represent the target market for its TASER ECDs. TASER devices deployed in support of strategic military operations in locations globally. Private security officers represent a range of individuals, including contract security patrol, healthcare, gaming, retail security employees and many others.
Reasons to Buy TASR Calls
As I have mentioned in the introductory part to this piece, not many options trader or even stock traders would be conversant with TASER International. However, the company is well known in the security industry and among law enforcement agencies for its TASER ECDs and for its body-worn video cameras for law enforcement officials. I have enumerated some of the reasons why I think you should buy TASR call options below.
Encouraging Financial Performance
TASER International released its third quarter (Q3 2014) results on October 30 and the company delivered beyond expectations in a quarterly performance that has already seen the stock rising more than 46% within the last 7 weeks. Highlights of the third quarter results are presented below:
TASER reported net sales of $44.3 million, an increase of $9.2 million, or 26%, compared to 3Q13 net sales of $35.2 million.
3Q14 EPS of $0.14 beat street estimates by $0.05.
TASER weapons segment grew $8.4 million year-over-year, or 26.5%, to $40 million during the third quarter.
Evidence.com and video segment revenues increased by $0.8 million, or 21.5%, to $4.3 million.
AXON cameras and Evidence.com had strong bookings of $15.3 million, an increase of $9.5 million, over 3Q13 bookings of $5.8 million.
It might interest you to know that the splendid third quarter results marks the 11th consecutive quarter of year-over-year top line double-digit growth for TASER. From the foregoing, it is obvious that TASER has had an excellent third quarter and we can look forward to see splendid results in the coming quarters.
Increase in New Orders for TASERs (Stun Guns)
The ugly incident in which police officer Wilson shot and killed and unharmed teenager, Micheal Brown rocked the U.S. for weeks about how violent encounters between police and civilians could have fatal consequences.
The fact that the grand jury’s investigation into the case did you yield enough evidence to indict the officer gave things an unpleasant turn, all of which could probably been avoided by the presence of a TASER (Stun Gun) or body-worn video camera. The stun gun could have been used against Michael Brown instead of the gun and a body-worn camera could have provided concrete evidence on what actually transpired that day.
Hence, I am not in the least bit surprised that TASER is recording an increase in the volume of new orders. TASER has reported the receipt of an order from the San Francisco Police Department (SFPD) for the supply of 160 AXON body-worn video cameras and a multiyear subscription to TASER’s EVIDENCE.com. It is expected that the SFPD order will ship out in Q4 2014 as we head into the first quarter of 2015.
Other notable orders include 168 Taser X2 for the Arizona Department of Public Safety, 259 X26s and recorders for Langley Air Force, and 169 X26Ps for the Las Vegas Metro Police Department. More so, the company has orders for an upgrade of 100 X2s for Louisiana State Police and 250 X26Ps for the U.S. Marshals Service Federal Law Enforcement Training Center.
How to Trade TASR Calls
I am bullish on Taser International and I recommend buying TASR Call options. I recommend buying the TASR Jun 2015 27.000 call (TASR150619C00027000) at an asking price of $3.90.
— Daily Option Alerts