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Overview
Taser (TASR)
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What to Do Next
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5 Stocks to Double
Overview
Thank you for your interest in Zacks and the 5 Stocks to Double report. This
report will give you an idea of the enormous resources available on Zacks.com.
I invite you to visit the site and get familiar with the Zacks Rank, our stock picking framework that has an impressive track record of generating market-beating returns year after year.
Each of the 5 stocks in this report was hand-picked by one of our stock strategists, who explain their rationale in the included stock write-ups. Clearly, this
report was not written for the risk-adverse or conservative investor. Rather,
these stocks are for the aggressive investor looking to add home-run potential to his or her portfolio. It would be prudent to devote no more than a small
portion of your overall portfolio to these stocks.
That said, we hardly threw darts at a board to arrive at these choices. All of the
stocks have catalysts that we think could fuel strong gains over the coming year.
We sifted through stocks that met Zacks Rank criteria and then chose the crme
de la crme. Each of the five stocks has unique qualities that make it a candidate
for this report. And they are all from different sectors, offering a level of diversification even in this small sample.
Most of the stocks in this report are currently flying under the radar of most
Wall Street analysts and traders, which provides a good opportunity to get in on
the ground floor. The market is littered with these kinds of stocks, but only the
ones with positive catalysts on the horizon burst onto the scene with monstrous
gains. We made sure that we could identify specific factors that would bring
these stocks out from obscurity and onto the lists of top performing stocks.
We are confident that you can realize enormous gains with these 5 stocks. Leave
the singles and doubles for other portfolios; we are swinging for the fences on
this one!
Best regards,
Sheraz Mian
5 Stocks to Double
Taser (TASR)
Ive been a big fan of todays Stock to Double for at least the past year. And
its not just because Ive liked the chart or its been a Zacks Rank #1 (Strong
Buy) several times. This stock has a great story behind it as well. Recently its
found a way to pick up a new revenue stream that its never had before as a
company. Theyve manage to transform themselves from a product manufacturing company to an online service company as well.
You may know Taser (TASR) for its non-lethal device that police officers use on
unruly college kids. Their electric devices are used by over 780,000 officials in the
US alone. These products help TASER bring in over $164 million in revenue each
year. But TASER is entering the body camera arena with a new line of products
for officers.
Competitive Advantage
TASER already has an edge in this space because it has an existing relationship
with precincts all around the US. It should be easy for them to lean on these
relationships to introduce their body camera products. Its a whole lot easier
to leverage a current relationship with municipalities than it is to try and create
one out of nowhere.
5 Stocks to Double
But the benefits potential revenue stream for TASER is beyond just the sale of
body cameras. TASER is transforming itself and horizontally integrating itself
by adding hosting services for the files the body cameras record. Its released
Evidence.com in order to provide an easy cloud-based hosting solution where
officers can upload their files for safekeeping. This is a sticky-money approach
for TASER and could potentially be a larger revenue stream than their current
devices provide.
Revisions
Analysts have taken note of the uptick in the video business. Over the last thirty
days alone, five analysts have increased their earnings estimates for the current
year while four have done so for next year. The bullish behavior has pushed up
the Zacks Consensus Estimate for the current year from 40 cents to 49 cents and
for next year the number has jumped from 55 cents to 59 cents.
TASSER has had some great EPS growth in the past. After a rough year in 2011
where EPS numbers were continually revised down, TASER turned things around.
Steady EPS growth and positive revisions were seen throughout 2012 and 2013.
Things seemed to stall out a bit at the start of 2014 as TASER began to shift its
focus to body cameras and away from their non-lethal weaponry. With the turnaround in the body camera business weve seen a turnaround in share price. As
you can see from the Price and Consensus chart below, recent revisions have
been to the upside for TASER. Further build out of EVIDENCE.COM will lead to
a more steady business as the subscription-based model draws more revenue.
5 Stocks to Double
The recent bullish analyst behavior has helped shares rally from $10 in July 2014
to the $31 level shares trade at today. A major rally into the end of last year ran
out of gas at the $28 level. A huge retracement to start March saw shares retreat
to below $22 before buyers gained the courage to jump back in. The surge back
through former resistance at $28 now sets that level as a long-term floor for the
stock price.
After hitting a fresh 52-week high of $34.98 shares sold off again, cooling off an
overbought commodity channel index. The CCI retreated all the way from over
200 to -100, swinging the pendulum all the way to oversold territory. From there,
this rally looks to extend on what could be a CCI Buy signal with the stock trading just below the 21 day moving average that currently sits at $32.46.
5 Stocks to Double
Bottom Line
TASER is transforming itself from a one-time purchase product to a reoccurring
revenue stream model with its body cameras and EVIDENCE.COM platform.
They should benefit greatly from the addition of these products to the modern
police form. The potential in the US alone is enough to warrant TASER being my
Stock to Double.
5 Stocks to Double
5 Stocks to Double
Worth noting is that one of their big brothers is Biogen (BIIB). In Biotech, small
companies rarely make the progress they do with expensive and long R&D trials
without the help of cash-rich established players. And the best news is that the
big guys partnership with the little guys is pure self-interest. In other words,
they wouldnt bother risking money or their good name on science they didnt
believe in.
The partnership began in January of 2014 when Biogen plunked down $20
million and promised $300 million more if certain R&D milestones were met
in two inherited blood disorders, sickle cell disease and beta-thalassemia.
According to a Fierce Biotech story by John Carroll
The deal brings a major league player to the genome editing game, which has
been gaining new attention with some significant new investments in the field.
In this instance, the technology can be used to address the abnormal structure
or underproduction of hemoglobin, either by knocking out a key regulator of
gene expression or inserting a corrective gene to substitute for the defective
one causing the disease.
5 Stocks to Double
5 Stocks to Double
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I follow the Baker Brothers for two primary reasons: first, they are obviously
enormously successful and good at what they do. There is one obvious caveat
here, though. Since they buy many dozens of Biotech companies, they take a lot
of swings knowing that they are not all going to work out.
5 Stocks to Double
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But the second reason I follow them is because they work so hard to know which
companies are worth their investment dollars. They dont have mandates like
most other fund managers that tell them what sectors to be in, what market
caps to buy, or when to be concerned about interest rates.
They get to focus on good Biotech companies and thats it. And since they are so
good at researching and advising these companies, nobody can tell them what
to buy or sell, or when. They are free to focus on excellent investing for the longrun.
I like that because I dont have time to go and get a biochemistry degree and
begin to understand all the complicated science involved. I need to be able to
trust the research being done on my behalf by the Bakers and other whales.
5 Stocks to Double
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Seventy percent of 2014 sales came from six customers: AB Volvo, PACCAR,
Daimler Truck, Caterpillar, Navistar and Deere. Seventy-five percent of sales
came from North America. It is headquartered in New Albany, Ohio.
CVG 2020
In September of last year, the company laid out its long-term strategic plan
known as CVG 2020. The main goal of the plan is to achieve sales and earnings targets commensurate with companies delivering top quartile total shareholder returns. More specifically, this mean a 6-8% compound annual growth
rate in sales from 2014-2020 and a 13-17% CAGR in EBITDA (earnings before
interest, taxes, depreciation, and amortization), according to the company.
5 Stocks to Double
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Attractive Valuation
The valuation picture looks attractive for shares of Commercial Vehicle Group.
As of June 4, the stock traded at just 10x 12-month forward earnings, well below
the industry median of 14x. Its enterprise value to EBIT (earnings before interest
and taxes) ratio was just 9, also below the industry multiple of 12.
5 Stocks to Double
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If Commercial Vehicle Group can consistently deliver on its CVG 2020 plans, I
would expect these valuation multiples to expand significantly over the coming
quarters.
Note, however, that CVG operates in a highly economic-sensitive industry, and
its shares are highly volatile. This is not a stock for the faint of heart. CVG is also
highly levered with a debt-to-equity ratio over 4. A prolonged economic downturn could create a lot of problems for the firm and its shares.
5 Stocks to Double
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5 Stocks to Double
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5 Stocks to Double
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Earnings are expected to rise by 25% in 2015 and another 16% in 2016, to a new
5-year high.
Yet shares of this small cap staffing company are still attractively valued. It has a
forward P/E of just 16.2, which is under the average of the S&P 500 of 18.3.
It also has a price-to-book ratio of 2.6. A P/B ratio under 3.0 usually indicates a
company has value.
Additionally, TrueBlues price-to-sales ratio of 0.5 is another strong sign of solid
fundamentals. A P/S ratio under 1.0 usually means a company is undervalued.
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What to Do Next
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