Axon Enterprise (AAXN)

Was worried about competition from Motorola. It trades at a high PE.

The shares did have a 12% rally year to date and are now tracking back to where they started the year. 

We continue to like the company. They have good growth and great execution. The valuation is high, which adds some risks and volatility.
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Is +832% in the past 5 years. This month, they reported another top and bottom line beat driven by strong demand, and they raised full-year forecast. Shares jumped 16% the next day, but gave back some of that.

AXON can be a very unusual trader. It had a big dip just prior to earnings, and then fully recovered. In the past year it has had several giant declines. While it is a $60B company, at times it still 'acts' like a small cap stock. Shares are up 29% this year and 108% in 52 weeks. It is expensive and that can increase volatility. Fundamental growth remains solid. There was no company news but this week insiders (mostly the CEO) did sell $8M worth of stock, and that seems to be the catalyst for the decline. But to put this in context, the CEO owns $2.3B in stock. With the stock's gains, even larger sales still mean he has more 'money' at risk than he did a year ago. We would not consider the sale significant and remain confident in AXON's outlook.
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EPS of $1.41 beat estimates of $1.25; revenue of $603M beat estimates of $587M. EBITDA of $155M beat estimates by 12%. It was a solid quarter. Revenue rose 31%. There was strength across all product segments and guidance was raised. Mgmt. is expecting 'record bookings' this year. Sales guidance for the year was raised about $150M to $2.6B. International growth potential remains very robust. Things look very good here.
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It's a tax asset, so in this global environment, take the loss. Axon depends on a global product replacement cycle. It's sold off, but the valuation is too high.

The sector is growing--there's a need for law enforcement tools around the world--but AAXN has only recently been profitable. He wants to see a sustained, long-term track record in a company. This is too early.

With the stock up 146% this year, some consolidation was needed and is probably healthy. We are seeing some big hits in many stocks today, with most having no news. Fundamentals are strong and estimates have ticked up in the past four weeks. The company has only really started to penetrate international markets, and likely has many years of growth ahead of it. It is not cheap, though, and investors are paying up for its market share and reliability. We would be very comfortable holding a position and buying into any futher weakness. 
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Business is good, and stock momentum excellent. Timing is rarely perfect. We would be OK adding a partial position for an investor just entering the stock. We think existing holders can wait a bit before adding: it is not likely to be a straight line up. 
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The question was on Axon but the guest doesn't cover it.

We can't of course predict prices with much accuracy, but it was a solid quarter for the company and things continue to look good. We would suggest buying half and filling the position if/when it consolidates a bit. 
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Manufactures tasers. A highly domestic kind of business. Have consistently been growing its EBITDA. Margins are very strong. Has been looking at this name for quite a while, but it just keeps running away from him. If you are looking for a name with a good alpha, and a domestic business, this is a good name to own. Trading at something like 50X earnings.

(Best call ever made.) He got in very early and this did very, very well. Stock went on to increase by 30X.