Recent Deals Propel Taser, DynCorp

Two of our favorite names in the Stocks Under $10 model portfolio had positive news following the long weekend, and we sent out an alert Tuesday to update our subscribers.

Our prime responsibility here at TheStreet.com is to manage the Stocks Under $10 service, which only focuses on -- you guessed it -- stocks that are currently trading below $10. We also cover this market for TheStreet.com, and if you've followed these types of stocks, you realize that it is often very difficult to get analysis of what's actually happening.

We wanted to examine those two companies now for you, and please note that much of this article went out to our subscribers yesterday -- although the news on both of these companies is still very pertinent. (If you would like to take a free trial to Stocks Under $10, please click here.)

The two companies that are in the news are DynCorp(DCP Quote) and Taser International(TASR Quote). DynCorp was once again awarded a $4.6 billion U.S. Army linguistics contract that has been under protest by L-3 Communications(LLL Quote), while Taser International announced two major new orders from U.S. law enforcement agencies.

Shares of DynCorp were recently trading at $16.45, while Taser was at $11.92.

First, DynCorp announced that -- for the third time -- the U.S. Intelligence and Security Command awarded the $4.6 billion linguistics contract to its Global Linguist Solutions joint venture. The contract has been under protest by L-3 Communications since December 2006, when DynCorp originally won the deal. We have updated readers regularly since then, noting the lack of substantial reasoning for the Army to reverse its decision.

We've stuck by this stock in spite of the recent downgrades by Goldman Sachs and CIBC, and we believe these analysts' negativity has kept shares at a level where the upside is much greater than the risk. Last week we noted that Goldman Sachs effectively assumed this linguistics contract would not be won, an assumption that we saw as questionable at best.

Turning to Taser, the company announced Tuesday that it had received two significant follow-on orders from the Indianapolis Metropolitan Police Department and the North Carolina Highway Patrol. The two orders combined total 644 units of its X26 electronic control device. We've been continuously bullish on Taser in the face of the pullback in shares during the opening weeks of 2008, and believe this order is a solid indicator that Taser's sales momentum is accelerating.

Last week the company announced quarterly revenue that came in ahead of analyst expectations, and we believe Taser's next quarter could be even more impressive. We expect shares to move higher in the near term based on continuing domestic demand, while the company makes progress in addressing the huge international opportunity that makes this one of our favorite long-term plays.

DynCorp and Taser are both included in the Stocks Under $10 model portfolio. Frank Curzio and Larsen Kusick regularly write about names in the under $10 universe, such as Brocade Communications(BRCD Quote), Cell Genesys(CEGE Quote) and VisionChina Media(VISN Quote), for TheStreet.com.