Defense: Security Plays

11/14/2003 12:00 am EST


Michael Norman

Publisher, Economic Contrarian Update

It is unfortunate that security is such a significant issue.  Jim Collins, sees potential in Taser, a company which makes less-lethal weapons. At the other side of the security spectrum is Armor Holdings, which makes both body and vehicle armor, a recent recommendation from Michael Norman. Here are their reviews.

"Taser International (TASR NASDAQ) provides advanced less-lethal weapons for use in the law enforcement, private security, and personal defense markets," says Jim Collins, editor of OTC Insight. "Taser energy weapons utilize compressed nitrogen to shoot two small probes, which are connected to the weapon by high-voltage insulated wire. The weapon transmits powerful electrical pulses along the wires and into the body of the target. The human target loses muscular control, usually falling to the ground. Their primary product targets law enforcement and corrections agencies. On October 16, Taser announced that the Phoenix Police Department has purchased 1,348 Tasers and have made the weapon a standard piece of equipment issued to every new recruit. They also sell a less powerful version and a low-end product to consumers.

"For the quarter ended Sept. 30, 2003, Taser record earnings of $0.25 a share, up from the $0.02 loss in the prior year. Revenues increased 216% to $6.1 million. Results in the quarter benefited from an increase in their customer base and growing acceptance of their products. The stock reached an all-time high on October 30. It receives an A rating for accumulation and has relative strength of 99. We caution that this business can be extremely unpredictable and quarterly results can be very volatile. We also note that management is young and that there are various litigation issues pending."

The latest featured stock recommendation from Michael Norman, editor of Economic Contrarian, also makes security-related products. The advisor says, "Armor Holdings (AH NYSE) is a manufacturer and provider of security products, vehicle armoring systems, and security risk management services. The company manufactures and sells a range of branded law enforcement equipment such as concealable and tactical body armor, hard armor, duty gear, less-lethal munitions, anti-riot products, police batons, emergency lighting products, forensic products, firearms accessories and weapon maintenance products. It also manufactures and installs ballistic and blast protected armoring systems for military vehicles, commercial vehicles, military aircraft and missile components, and provides sophisticated security risk management solutions to various clients. This latter division is classified as held for sale."


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