TASER (TASR) Shares Up on Obama's Call for Body Cameras - Analyst Blog

TASER International Inc.'s (TASR) shares closed the Tuesday session at $23.34, gaining 5.7% on the heels of the news of President Obama proposing a funding of $263 million for the purchase of 50,000 body-worn cameras for law enforcement agencies.

The funding includes $75 million over three years to be spent by the police on the purchase of cameras. The overall funding also includes provisions for additional training of police officers.

The White House plans to equip 50,000 officers with cameras, thereby doubling the number of cameras presently in use in the country.

The Reason behind Obama's Call

The President's call to provide federal funding comes in the wake of the unrest that took place after a grand jury refused to lay charges on an officer who shot an unarmed black teenager on suspicions of a robbery in Ferguson, MO.

Obama was concerned that the Ferguson incident would result in serious lack of trust between the police and the community at large. He believes that the new standards and body-worn cameras will make the police force more judicious in its use of firearms, thereby reducing unfortunate incidents like the Ferguson case.

TASER's shares rallying to an all-time high

TASER's shares surged above 70% since the Ferguson incident in Aug 2014. Following the news of Obama's funding on Monday, TASER shares have rallied 8.7% in the last two days on expectations of higher demand for its recording gear. The cameras are adept at recording everything in sight with clarity and can be easily mounted on glasses or chest.

Earlier, TASER's shares had gained 6.2% on Nov 26, 2014 following the news of the Winston-Salem Police Department ordering 623 AXON body-worn video cameras. (Read more: TASER Stock Rallies as Police Force Orders AXON Cameras)

Industry Peers

Digital Ally Inc., (DGLY), a manufacturer of body-mounted video cameras, closed the Tuesday session at $18.69, up 45.2%, while GoPro, Inc., (GPRO), a developer of action-cameras gained 0.5% at the end of the trading session on Tuesday at $73.89.

Zacks Rank

TASER holds a Zacks Rank #2 (Buy). Another equally well-placed stock in the same sector is Brady Corp. (BRC).