Taking Stunning Taser Profits off the Table

Jul.24.07 | About: TASER International, (TASR)

Shares of Taser have been on an incredible run for the last three months. We entered a position in Taser back in late March and since then shares of Taser are up over 120%. In that time frame Taser has successfully released the C2 [a smaller version of their police weapon- ed.], and they have started to gain traction in foreign markets.

Although the fundamentals at Taser have certainly improved and the concern about wrongful death lawsuits has been largely mitigated, we think shares of Taser have outpaced the underlying business fundamentals. In the most recent quarter announced this morning, Taser posted earnings of $3.7 million on sales of $25.9 million. These numbers handily beat analyst estimates, but with a forward P/E that is still over 50, we think this is a good time to take profits in Taser.

Taser bulls will argue that the big French order promised by Nicolas Sarkozy before the French election has yet to materialize. Although a large order from France will likely produce yet another jump in Taser shares, we prefer not to wait around for a slow moving French government.

Suggested Trades:

Sell TASR near $18.40

TASR 1-yr. chart:

Taser Investment