Hedge Fund Guru Emmanuel Lemelson Explains How To Balance Investments And Morality In Ferguson, MO
Protests and civil disorder began in the town of Ferguson, Missouri after the fatal shooting of Michael Brown on August 9.
The media offered what seemed like 24-hour live coverage touching on hot topics including racism, gun control, militarization of police and appropriate use of force.
Nearly three months later, the debates and conversations continue on Main Street, but Wall Street investors may be looking at the tragic event from an investors standpoint, looking to realize long-term returns following a tragedy.
Reverend Emmanuel Lemelson may be considered a top source on morality, spirituality and investing. In addition to being a Greek Orthodox priest, Lemelson is the chief investment officer of Lemelson Capital Management, which was named the world's top-performing long bias hedge fund in August by BarclayHedge.
“Investors must not overlook the certainty that they have the potential to affect incredible good beyond themselves in so far as they have been entrusted with decisions regarding where capital is or isn't allocated,” Lemelson told Benzinga in an interview.
A Material Impact
“Consequently, there can be no question, that the investor has the ability to materially impact society in a positive way.”
One of the companies that gained attention through the tragic events in Ferguson is Digital Ally, Inc. (NASDAQ: DGLY). The company specializes in advanced digital video police cameras, fleet event recorders and law enforcement surveillance equipment.
Shares of Digital Ally surged to all-time highs of $33.59 in the days following the shooting in Ferguson on substantially higher than normal volume. Shares were trading below $5 before the shooting as the small-cap company was fairly unknown to traders, investors and the overall investment community.
“It would be a shame to overlook companies that may prevent another ‘Ferguson' from happening again,” Lemelson wrote.
Digital Ally may in fact be a company that can help reduce the likelihood of another tragedy occurring. On October 27, shares of Digital Ally rose after the company disclosed it received a $300,000 contract from a police department in the San Francisco area.
“The faster capital can be allocated to good companies that might prevent such a thing from happening again, the better,” Lemelson wrote.
Another company brought in to the spotlight following the shooting in Ferguson is TASER International, Inc. (NASDAQ: TASR), the maker of non-lethal electrical weapons designed for use in law enforcement. TASER also sells its own version of cameras designed for use on law personnel.
On October 30, TASER reported its third quarter results, which surpassed analyst expectations, sending shares soaring to new 52-week highs.
TASER's management said during its post earnings conference call that “the unfortunate event at Ferguson put a spotlight on the issue upon officer cameras both within communities and in law enforcement."
TASER's Chief Executive Officer Rick Smith admitted that the events in Ferguson had “very little” to do with the company's positive third quarter results. The executive did add that the events in Ferguson drove a shift in inquiries and the company expects to see changes in its booking numbers in a quarter or two.
Smith also stated that his company has a clear advantage over its competitors. The executive said during the company's conference call that TASER is “the only proven, scalable, end to end solution in the marketplace today.”
The executive did not reference any of its competitors, but Digital Ally investors (and prospective investors) should consider the executive's comments. Digital Ally is scheduled to report its third quarter results and conference call on Friday, November 14.
Words Of Encouragement
Lemelson offers investors encouraging words to part with:
“The ability to make wise discernment however must remain foremost among traits of character, not only for achieving the returns for which the manager is charged, but indeed to realize returns in such a way that glorifies not only the activity itself, but the very source of the talent as well.
"In this regard," he added, "faith, is beyond value, and more specifically a faith that calls to mind that capital is never a personal possession for it is in such a moment of detachment (and its related humility), that one is free to achieve truly extraordinary things.”
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