Body Cam Stocks: Buy the Dip!

It’s been over a year now since the fatal shooting of Michael Brown in Ferguson, Missouri sparked a long wave of national demonstrations over police brutality and widespread accusations of systemic racism throughout the United States.

Since the loss of Brown, we’ve seen a large number of “Black Lives Matter” protests in response to the deaths of young black citizens including Tamir Rice, Freddie Gray, and Sandra Bland, to name just a few.

In the wake of these incidents, many are now asking what, if anything, has changed?

The answer to that question is long, complex, and, in many ways, out of the scope of what we do here. In terms of political opinion, there’s not much I’m willing to say on this forum. After all, this is a website about moneymaking opportunities related to technology — not social justice or anything of the sort.

Of course, that doesn’t mean issues of police brutality and alleged racism here in the U.S. don’t merit any of our attention. In fact, the Black Lives Matter movement happens to be directly relevant to a small selection of companies and their stock performance.

No matter your position on any of these recent incidents, there’s one form of change that’s impossible to deny: Whenever a black person in America dies at the hands of police, the relevant department will now receive enormous pressure from civil rights activists demanding justice…

And the one thing more damaging than anything else for these departments is the absence of clear evidence.

Last year I wrote an article titled “Why Police Body Cams are Absolutely Necessary After Ferguson.” My position was not to advocate for or against the indictment of alleged shooter Darren Wilson, but instead to advocate for the presence of video evidence in order to quell unrest.

Here’s part of what I said:

I’ve realized over the past week that we are, as a nation, far too immature and hardheaded to handle obscurity with any level of reason. If there are holes, we will fill them with assumptions — apparently that’s easier than simply admitting what we do not know.

I’ve come to the depressing conclusion that we do, in fact, need every law enforcement officer to start carrying a body camera. Otherwise, whenever a situation similar to Ferguson happens, people will run rampant in the streets of uncertainty, spouting their ignorance and unsupported beliefs to anyone who will listen.

As much as I hate the idea of recording someone’s actions for his or her entire work shift, this is what it has come to in a world where trial by media holds substantially more power than trial by jury. Far too much tension has come of this situation, and it’s all because none of us know what actually happened.

Since this article was published, my words have undeniably rung true. Let me give you just a few examples of how the BLM movement has responded to cases with clear evidence vs. those with a lack thereof:

Clear Evidence: In April, South Carolina police officer Michael Slager shoots black American Walter Scott in the back. The shooting is caught on video and Michael Slager is charged immediately. Justice is served, and there are no subsequent national protests over the killing of Walter Scott.

Lack of Clear Evidence: In April, 25-year-old Freddie Gray dies in police custody in Baltimore, Maryland. Lack of video evidence both during Gray’s arrest and inside the police van that was transporting him lead to widespread speculation over what had occurred. Riots in Baltimore lead to 202 arrests, 144 vehicle fires, and 15 building fires.

Clear Evidence: In July, an unarmed black male by the name of Samuel Dubose is shot and killed by University of Cincinnati police officer Raymond Tensing. The shooting is caught on Tensing’s body cam, and he is charged immediately. Once again, no national protests occur.

Lack of Clear Evidence: In July, black female Sandra Bland is found hung in her prison cell. There is no video of her death, leading many inside the BLM movement to suggest the police killed her and attempted to cover it up.

Again, the intention here is not to make any definitive statements on who is right and who is wrong in these situations. I’ll leave that up to you as the reader to decide.

The point relevant to investing is simply that lack of pervasive video evidence has become a major liability for police departments here in the States. The only reliable way to avoid sustained national criticism is to record these events.

When the evidence is there, the decision of whether or not to indict becomes quick and painless.

In the immediate wake of Ferguson, this line of thinking sparked a massive run-up in police body camera stocks, most notably Digital Ally, Inc. (NASDAQ: DGLY) and Taser International, Inc. (NASDAQ: TASR).

The rationale was sensible, but the buying spree was not. Body cam stocks became overvalued, and many investors ended up getting caught up in the hype, buying right at the peak.

A year later, though, and these body cam stocks have cooled off dramatically. Digital Ally in particular has retreated to near pre-Ferguson levels, opening up an attractive entry point for any investors who wish to get a piece of this growing trend.

All the while, body cam sales have been going straight through the roof.

Digital Ally, for one, last recorded $5.6 million in quarterly revenue, up 63% from a year prior. Likewise, Taser International reported record body cam sales, with the related segment up a hefty 170% from the year prior.

If you’re looking to invest in this niche industry, now is as good a time as any.

Until next time,

Jason Stutman

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