Taser International (TASR): Today's Weak On High Volume Stock

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 weak on high relative volume 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 $144.7 million.
  • TASR has traded 807,983 shares today.
  • TASR is trading at 3.24 times the normal volume for the stock at this time of day.
  • TASR is trading at a new low 4.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 93.0. Currently there are 3 analysts that rate Taser International a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Taser International has been 2.4 million shares per day over the past 30 days. Taser International has a market cap of $1.8 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of -0.46 and a short float of 27.9% with 2.80 days to cover. Shares are up 29.9% year-to-date as of the close of trading on Thursday.

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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 these 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 3.4%. 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 ($0.39 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 68.10%. 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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