Taser's Growth Days are Behind It (TASR)

| About: Axon Enterprise, (AAXN)

I've written over the past two days about deciding on a few stocks to sell. Today, one of them helped make the decision for me.

I have been ready to sell Taser anyway but Friday's notice that they are having further accounting problems was enough to push me over the edge. It doesn't sound as though the problems are suspect or terribly serious, but Taser management hasn't built up a huge well of trust that would allow me to fully believe that the problems were just minor clerical errors.

I sold Taser International (TASR) Friday morning at $9.25 - a bit lower than I might have sold them had I thought more quickly and put my sale through yesterday, but on the whole I'm happy to be rid of this one.

Taser was one of my smallest holdings, partly because I never put very much in and partly because it has fallen by roughly 50% from my purchase price (average cost was about $17). I wrote a few times about Taser when they were busy crashing and burning, as well as when they were rebuilding. I did believe then that the panic which sent shares to $6 was an overreaction.

But now shares have recovered somewhat and they no longer seem too valuable to sell. While I think the product is a good one and I like that it's getting used instead of firearms in some situations, I don't think the growth will return to the heady days of 2004. I expect slow growth from the company as they recover from their scandals and from the bottom falling out of their market (that's if they ever recover their sales growth; who knows what will happen with this latest accounting restatement). However, I don't think they're going to be catching lightning in a bottle again and selling hand over fist to every police department in the world.

I'm not selling this because of the nature of their product or because I think the company is worthless. But with a new scandal brewing (that's probably a premature thing to say, but this is definitely more evidence that management is having trouble keeping track of the business), in addition to what I see as a period of slow growth ahead, I'm no longer willing to hold this company at a high PE that assumes dramatic future growth.

So one down, at least three to go. TASR is off the board and I feel better for it.

TASR 1-yr chart:

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Tagged: , Aerospace/Defense Products & Services
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