Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Taser International

(

TASR

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Taser International as such a stock due to the following factors:

  • TASR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.0 million.
  • TASR has traded 2.4 million shares today.
  • TASR traded in a range 268.3% of the normal price range with a price range of $3.48.
  • TASR traded below its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on TASR:

TASER International, Inc. develops, manufactures, and sells conducted electrical weapons (CEWs) worldwide. It operates through two segments, TASER Weapons and AXON. TASR has a PE ratio of 7. Currently there are 2 analysts that rate Taser International a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Taser International has been 2.2 million shares per day over the past 30 days. Taser International has a market cap of $1.6 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of -0.06 and a short float of 28.5% with 7.49 days to cover. Shares are up 19.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Taser International as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 23.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TASR's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.69, which clearly demonstrates the ability to cover short-term cash needs.
  • TASER INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TASER INTERNATIONAL INC increased its bottom line by earning $0.36 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($0.50 versus $0.36).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 112.5% when compared to the same quarter one year prior, rising from $3.39 million to $7.21 million.
  • The gross profit margin for TASER INTERNATIONAL INC is rather high; currently it is at 67.38%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.09% is above that of the industry average.

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