Last night, stun-gun maker Taser International (NASD: TASR) reported results significantly below last year's levels. None of this is a surprise which is why the stock is down about 80% from it's highs set about a year ago. In honor of this decline, let's have a look back to one of my favorite Motley Fool articles entitled Love That Taser!:
While Wal-Mart is saying that earnings are tracking the low end of estimates, Taser is saying, "Guess what? Business is good. It's so good that we are raising the revenue forecast by 50%. Yes, we expect revenue to be up 150% this year." Bravo!
While Walgreen reported another double-digit increase in revenue and earnings, Taser is talking about its second year of 150% growth. In the world of the tortoise and the hare, Taser is definitely the hare.
While beleaguered Nortel Networks rises on hopes that cash-rich Cisco Systems may be interested in it, Taser shares are surging 15% in the pre-market because of excellent business news. So why are shareholders who purchased this hare in April pulling their hair out?
Taser hit an all-time high in April. From that point to Friday's close, the stock has lost a stunning 60%. Ouch.
Before you cry too many tears for those nursing big losses, consider that over the last 52 weeks (measured as of Friday's close) the stock has soared 1,300%. That's still the kind of gain most investors dream of -- Taser under the pillow or not.
In January, the fuss over Taser was about a stock selling for 200 times trailing earnings. Well, it's trading at 94 times earnings now. But the stock market is a leading economic indicator. Is that too high a multiple for a company growing 150% a year? Hardly.
Wow. You always have to compare one investment against alternatives, but the Foolish W.D. Crotty truly takes this to new heights, comparing Taser favorably against totally different companies in totally different stages of maturity. Put simply, this is a great lesson in how not to think about investments.
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