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Mark Fidelman
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Mark Fidelman is the CEO for Raynforest, an influencer marketing platform. He is a prominent speaker, writes the Socialized and Mobilized Columnist on Forbes and is the author of the book SOCIALIZED! His experience includes more than two decades of technology sales and marketing with... More
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  • GRDH: Why This Stunning Non-Lethal Device Company Is A Great Buy

    One thing is clear, the public outcry about police and security guards using deadly force is reaching new levels of hysteria.

    And companies like Taser (NASDAQ:TASR) and Digital Ally (NASDAQ:DGLY) are up as a result. Those who still believe that lethal options rule the police and security guard market are quickly coming to realize that the public mood has shifted drastically. The current discussion in most law enforcement and security organizations involves non-lethal defense options and security monitoring.

    But both Taser and Digital Ally are trading near their highs so where can value investors go to take advantage of this long-term trend? There's a standout company in the sector which actually benefits from the need for new additional non-lethal and monitoring options and can help you ride the momentum of the non-lethal wave.

    Profile: Guardian 8 (OTCQB: OTCQB:GRDH): Inside one of the most undervalued stocks

    The stock is a relative newcomer, having only started trading in early 2012, Guardian 8 developed and is beginning to distribute a new defense solution to professional security organizations, private professionals, and law enforcement domestically and internationally. In addition, they plan to target individuals and families in the United States and internationally with a consumer version by early 2016.

    They manufacturer the G8 Pro V2, an enhanced non-lethal (NYSE:ENL) security device designed for use in the professional security industry. They've recently sold product to Anderson Security, Securatex, and several Fortune 1000 companies which could rapidly turn into larger deals which would positively impact their revenues significantly.

    Guardian 8 has also steadily gained market share in other areas of the security space and recently won the Campus Safety BEST Award from Campus Safety Magazine in the Personal Gear & Equipment category. However, as Guardian 8 sets its sights on broadening its security footprint, questions remain about how they'll handle the growth and opportunities that are emerging. They're still a relatively small company and remind me of Taser in 2002.

    (click to enlarge)TASR Chart

    The Opportunity

    Thus far, Guardian 8 has relied on the G8 Pro V2, an effective device that has both a laser targeted, and an on-device audio/visual camera that activates the second the safety is engaged. A half pull of the trigger notifies authorities with a prerecorded message indicating a need for assistance, allows real time communication with the authorities, emits a load warning siren and intense light to disorient and temporarily reduce vision. And with a full pull of the trigger (level three) there is sufficient pepper spray to disable multiple potential assailants at a distance or 10to 12 feet in a non-lethal manner.

    Domestically, the professional security market for the device is at least four times the size of the Taser's law enforcement market. And because 95% of the current security force armed with only a flashlight and mobile phone, there's huge market potential if you can equip even a fraction of them with a non-lethal device and an audio video recorder. On top of professional security, the potential market for K-12 and college security nationwide, US governmental agencies (Customs, Border Patrol, VA Hospitals, etc.) as well as eventually the consumer market is off the charts.

    Outside the United States where firearms are far less common or accepted, the market also opens up to law enforcement on top of the security guard industry. For example, many countries in Central and South America and the Middle East either do not allow or are shying away from local law enforcement carrying firearms at all. China alone has 2.5 million police and almost all of them are not equipped with ANY defense device, let alone firearms. However, selling a new non-lethal technology such as the ProV2 in foreign countries still requires companies like Guardian 8 to secure import approval.

    As we've seen with security related lawsuits can reach as high as $26 million for failing to protect citizens to $58 million for overly aggressive security guards. These staggering numbers underscore the importance of having a sound security risk mitigation strategy. On officer video of some kind will become the standard in law enforcement and eventually the security industry as well, and Guardian 8 should be able to capitalize on this once the industry understands that audio/video alone can eliminate 70% of potential liabilities.

    The Risks

    As with any small cap company, it remains to be seen if Guardian 8 will capitalize on the huge opportunity or cede it to a competitor. From personal experience, the decisions in the law enforcement and security markets can take an agonizingly long time especially with disruptive new technology, so Guardian 8 will need to remain tenacious and focused on developing the market. The upside is the Guardian 8 board and management are filled with extensive executive experience from the likes of Taser, Smith and Wesson, the security industry, and Fortune 1000 companies.

    In Sum

    The security market will move towards non-lethal options and on-officer video and audio equipment. However, like Taser, Guardian 8 will need to create demand for an industry that hasn't focused enough on officer or citizen safety. But there's no question - the size of the market, the demand for non-lethal and video products, and the reduction in liability will produce some big winners for those companies that develop and capitalize on the market.

    Guardian 8 has its work cut out for them, but they certainly can have the management team, resources and relationships to win here. Zacks small cap research agrees, they recently projected the stock to hit $0.90 within the year, "Since Guardian 8 has the potential and is expected to generate meaningful revenues within the next 12 months, our price target is based on a price-to-sales ratio valuation using estimated revenues for the ensuing 12-month period. At a P/S ratio of 12.5 on projected sales of $3.4 million, our price target remains $0.90."

    Jan 12 3:01 PM | Link | 4 Comments
  • ENCR: A Clean Energy Stock With A Real ROI

    For the most part, I like to talk about the companies that I like or the ones that I am invested in. Sometimes though, there are companies I'm not invested in, but advise, and whose stories need to be told.

    There are lots of reasons that a company receives or doesn't receive coverage. Perhaps their management team isn't strong, it may not have a customer base, they might be in a market that highly speculative, or the market for its products simply doesn't exist. In the case of Ener-Core OTCBb: OTCQB:ENCR, none of these conditions exist and thus it deserves your attention.

    As you know, investing in OTC stocks can be risky, but as Philip Fisher, investing guru and author of Common Stocks and Uncommon Profits, advised investors not to "ignore a good stock just because it is traded 'over-the-counter.'"

    So why do I like Ener-Core? Undoubtedly, there are many energy related stocks that deserve your attention, and a lot of them carry less risk. Unfortunately, a lot of these stocks don't have the upside potential that Ener-Core carries. Let's look at why I believe Ener-Core will outperform its peers over the next 24 months.

    Massive Market Potential Returns

    Ener-Core business is to take poisonous gases and convert them to energy profitably - and they do it without tax credits and without any other incentives. What takes Mother Nature twenty years to oxidize air polluting gases, takes Ener-Core technology hours. Virtually every factory, landfill, oil refinery or coal mine that produces poisonous gases can potentially use this technology. So the market is big.

    The company's $18 million Market Cap is well below market value - their technology patent portfolio alone is worth more than that. So far the company hasn't attracted much Wall Street attention, but savvy investors will find the stock mispriced. Their stock price is also down year over year, but given their recent activity (we'll discuss below), the stock should change direction shortly.

    The value proposition is solid

    Unlike other green technologies, Ener-Core enables any company flaring a gas to become more financially effective and operationally efficient while keeping the environment safer from greenhouse gases.

    In other words, this is a company that takes gases no one wants and converts them to energy that everyone wants.

    Their sales pipeline is strong

    Ener-Core has a commercial deployment that has proven the technology works which is why multinational industry leader Dresser-Rand (NYSE DRC) has made a strategic decision to license Ener-Core's technology. Given both, their sales team has been able to build a strong pipeline.

    Follow the Board

    Highly reputable, respected professionals don't join small companies they don't believe in. Their options are much too big. Ener-Core's board includes the former head of the EPA and Senior Executives from Bechtel and Caterpillar. They see something big happening and they don't want to miss out.

    It must be noted that Ener-Core has been hampered by capital constraints that have significantly improved in the past few months by capital injections. Because their conservative customer base is deeply concerned with long term viability, that may explain some of the delayed orders that CEO Alain Castro was expecting earlier in 2014.

    Going forward, Ener-Core intends to increase its market share by selling a new system that is 8 times as powerful as the current system. That's one of the primary reasons Dresser-Rand moved forward with their partnership. Ener-Core's new challenge will be to educate an untapped market about a new technology that most companies don't know exists. If they can execute on that and sell on the high ROI, this company will be far more valuable than its stock price reflects today.

    Dec 22 3:57 PM | Link | 3 Comments
  • Who Gave Warren Buffett the Authority to Discuss Billionaire Guilt?
    File:Warren Buffett KU Visit.jpgWhat is it with billionaires these days? Buffett suggesting we need to tax him more? Stop coddling the super-rich he says.
    In other words, he’s saying “I’ve done such a fine job with my money, now I want to give more to a government that hasn’t.”
    Mr. Buffett, has someone changed your suppositions? It seems counter intuitive to your “invest in great management” philosophy. Shouldn’t you really be telling the government to cut costs? Just like you demanded of your Netjets, Clayton Homes, and Helzberg Diamond Shops executives.
     
    In fact you said, “We have no alternative,” at your annual meeting in May 2009. Really? Why didn’t you just raise prices on your most profitable customers? Couldn’t they afford it? Stop coddling them Mr. Buffett.
    Buffett writes, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.”

    What they do Mr. Buffett is invest somewhere else. Like overseas. And guess what, they don’t bring that money back into the US because of our high tax rates. That’s an estimated $60 billion a year that could be used to pay down the $14 trillion dollar debt that the same government you want to give more money too, owes everyone else.
     
    Since Mr. Buffett thinks the government can do a better job with his money than he can, then give it to them. We can sure use it. You’ve already given the government $7 million last year, what’s $50 million more? You can afford it. Stop talking about giving more and just do it.
     
    Which begs the question, why hasn’t he already? Is it because he doesn’t trust the government to spend his money wisely? Doesn’t he like Washington’s management?
     
    Haven’t you always said Mr. Buffett to invest in what you know? You seem to know a lot about taxes and Washington, so write the check. Go ahead and put your money where the sun doesn’t shine or as the rest of us non-billionaires call it, the Federal Deficit. 


    Disclosure: I am long BRK.B.

    Additional disclosure: I am writing a negative opinion piece about a stock I have owned for years. I don't have any plans to sell it since he's a genius stock picker, but a terrible political commentator.
    Aug 16 3:04 AM | Link | Comment!
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