Two Smallcap Winners: TASER and Acorn Energy

Includes: ACFN, TASR
by: Thomas Englebert

Following find two stocks that we feel will outperform the market in the near term. One is oversold and one is undiscovered.

TASER International (TASR) $7.46, is in our opinion currently in an oversold position, down more than 20% since last week. The company reported 1st quarter earnings having more than doubled to $1.2M, from the prior year's $494,554, but missed the Street's expectations. TASR is currently trading just off it's 52 week low and makes for what we feel is an attractive entry point. For its part, this week the company said it's board approved a plan to repurchase up to $12.5M in common stock.

Also take a look at Acorn Energy (ACFN) $4.74, which defines undiscovered small-cap. Volume is paltry but the numbers are funky. A P/E of $1.78? EPS of $2.67? A book value of $6.50 a share, with a miniscule 13.9M shares outstanding. What gives you ask?

TASER International (TASR)


TASER International (Nasdaq: TASR) develops, manufactures, and sells electronic control devices for use in the law enforcement, military, corrections, private security, and personal defense markets in the United States and internationally.

It offers two product lines for law enforcement, military, corrections, and professional security markets, which include various cartridges, a battery system, a digital power magazine, download software and equipment, extended warranties, and holstering options and accessories. The company also manufactures devices for the consumer market.

TASER's products protect life, providing advanced Electronic Control Devices (ECDs) for use in the law enforcement, medical, military, correctional, professional security, and personal protection markets. TASER devices use proprietary technology to incapacitate dangerous, combative, or high-risk subjects who pose a risk to law enforcement/correctional officers, innocent citizens, or themselves in a manner that is generally recognized as a safer alternative to other uses of force. TASER technology protects life, and the use of TASER devices dramatically reduces injury rates for law enforcement officers and suspects.

TASR Investor Highlights

  • Announced that the Board of Directors adopted a resolution approving a stock buy-back program authorizing the Company to purchase up to $12.5 million of the Company's common stock.
  • For the first quarter of 2008 revenues were $22.5 million, the highest first quarter revenue in the Company's history and a 47% increase over the same quarter of the prior year.
  • Income from operations for the first quarter was $1.6 million, a 361% increase compared with $0.3 million in the prior year period.
  • Net income and basic and diluted earnings per share for the first quarter of 2008 were $1.2 million and $0.02, respectively.
  • International sales accounted for approximately $3.0 million or 13% of total sales in the first quarter up 64% from the first quarter of 2007.
  • Recently announced that The Sports Authority will carry TASER C2 Personal Protector devices in selected stores nationwide. The TASER C2 will be available initially in 138 of the 433 Sports Authority stores in April.

Acorn Energy (ACFN)


Acorn Energy (Nasdaq: ACFN) is a holding company focused on improving the efficiency of the energy grid and reducing the environmental impact of the energy sector. Acorn Energy's operating companies leverage advanced technologies to transform the existing energy infrastructure. Acorn's strategy is to take primarily controlling positions in companies led by great entrepreneurs and add value by supporting those companies with marketing, strategy and business development.

Acorn Energy is a global company with equity interests in three listed companies: 1,762,391 shares (8.6%) of Comverge (listed on the Nasdaq Global Market), 407,000 shares (31.4%) of Paketeria AG (listed on the Frankfurt Stock Exchange), and 15,714,285 shares (22.4%) of GridSense (listed on the TSX Venture Exchange). Acorn also has controlling or significant interests in three private companies: CoaLogix, (100%); DSIT (72%); and Local Power (10%).

ACFN Investor Highlights

  • The Company recently created CoaLogix, Acorn's new platform for participating in the burgeoning market for clean coal solutions and acquired SCR-Tech, a leader in catalyst cleaning and regeneration for coal and other fossil fueled plants in November, 2007.
  • Acorn Energy completed its acquisition of a significant minority interest in GridSense in January 2008, providing the Company a strong foothold in Asia and the emerging field of remote monitoring and control systems for electrical utilities.
  • In January 2008, the Company completed the redemption of its outstanding convertible debentures and as a result has virtually no debt.
  • In February 2008, the ACFN's DSIT subsidiary, a leader in the field of threat detection for underwater energy infrastructure, announced $1.4 million in new contracts involving the integration of subsystems developed by DSIT into systems built by customers and opportunities to expand the projects in the future.
  • The CoaLogix subsidiary announced in March that in the first two months of 2008 it had secured new contracts from major U.S. utilities potentially representing more than twice its entire 2007 sales.
  • Signed a letter of intent in March 2008 to acquire Software Innovation, the developer of Coreworx[TM], a world-leading software tool for collaboration for energy and other infrastructure for capital projects.
  • Recently announced that its DSIT subsidiary has been awarded new development and production projects at a total value of approximately US $900,000.
  • ACFN has virtually no debt and approximately $13.6 million in unrestricted cash.
  • Acorn Energy now owns significant interests in three listed companies: 1,762,391 shares (8.6%) of Comverge (listed on the Nasdaq Global Market), 407,000 shares (31.4%) of Paketeria AG (listed on the Frankfurt Stock Exchange); and 15,714,285 shares (22.4%) of Gridsense (listed on the TSX Venture Exchange). Acorn also has controlling or significant interests in three private companies: CoaLogix, (100%); dsIT (72%); and Local Power (10%).

Disclosure: None