Guns…
A lot of Americans love them.
A lot of Americans hate them.
Growing up in rural North Carolina, they were just a part of our lives.
My father had shotguns and rifles all around his office. Up high, out of the reach of children, of course.
Teenagers would show up to school with them hanging in the back window of their pickup trucks (that was discouraged as we entered the ‘90s).
My 6th grade Christmas gift was a video game and … a 20-gauge shotgun. Hunting with shotguns and rifles was just a part of country livin’.
Despite growing up with guns, I never held a handgun until I was 28.
I remember it well.
It was a different feeling.
The handgun was designed to kill or harm a person. Not to put food on the family table.
I felt uncomfortable just holding it.
As I aimed it at the black silhouette of a man, it made me think of what a police officer might feel as he aimed it at a live human being.
There is a lot of weight, and responsibility, with a handgun. Pulling the trigger put another’s life in one’s hands, and would often create tremendous remorse for any officer using a gun in the line of duty.
Around the year 2000, police officers started carrying another weapon … the Taser.
A Taser is much safer.
Instead of sending a bullet through a person, the gun sends 50,000 volts of electricity through a person, stunning them.
We’ve all seen the videos of people falling down, shaking violently, into submission.
Today, an estimated 94% of police departments have Tasers.
This is why Taser maker, Axon Enterprises (Nasdaq: AXON), hauls in $1.2 billion annually.
And it’s why shares of Axon have gone from $5 a share in 2015, to $250 a share today.
That’s a gain of 5,000%.
I missed out on those gains, and you may have as well, but … we have a second chance at them.
Here’s why. Taser has a problem. They are far more deadly than advertised.
A Taser user is, after all, shocking people with 50,000 volts of electricity.
Reuters counted more than 1,000 deaths to date, and they are climbing rapidly.
Ninety percent of these people were unarmed.
There are horror stories of pregnant women, minorities and just ordinary traffic violations turned deadly for almost no reason, due to the misuse of Tasers.
(Here’s the crazy part: Another study found that gun deaths by police have not declined, despite widespread Taser adoption.)
Meanwhile, lawsuits are piling up in cities around the country, some of them ending in multimillion-dollar settlements.
That includes a $6.5 million verdict against a cop who tased a high schooler and dropped him face down on the pavement.
Some big-city police departments like the LAPD are even seeing $100 million lawsuits being filed for Taser-related deaths.
With lawsuits impacting both police departments and individual police officers, these payouts simply aren’t sustainable.
Plus, the paperwork alone is so overwhelming cops are thinking twice about even carrying them.
Cities are also frustrated by the cost of buying the devices, which can go up to $1,500 each for higher-end models. They argued in court that Axon is using its monopoly to run up prices.
Long-term contracts run into millions of dollars, with big cities like Baltimore paying Axon over $1 million annually.
Bottom line, Tasers are far too costly, in terms of dollars, paperwork, litigation and, most importantly, loss of life.
Now, there is an alternative …
And this alternative could lead to another 5,000% opportunity for investors.
Take a look at this device…
It looks a bit like a stud finder…
But it’s actually a nonlethal weapon that can incapacitate without a dangerous electric shock.
The product is called BolaWrap.
You’ve probably seen pictures of primitive hunters using a rope with weights on either end, called a bola. Hunters would throw it at prey to wrap up their legs.
The BolaWrap is the same idea, modernized.
Just aim, pull the trigger, and two ropes shoot out with small hooks on the end … wrapping a person up.
It does nearly no harm. A potential prick, at worst.
Targets are immobilized. Again, without an electric shock. And the consequences of being shocked and knocked to the ground.
Police officers seem to love the new device.
“Now we have a tool to use to de-escalate things very rapidly,” says Glenwood Springs, Colorado, police Chief Joseph Deras.
“As we try to explore new and innovative ways to do our jobs more effectively and more humanely, this became a very attractive device for us,” says Franklin County, Vermont, Sheriff John Grismore.
“Police officers have to use force, it’s an inevitable reality of what we do … But this gives us a tool to use a much, much lesser level of force, and hopefully, the ability to deescalate that situation before more force is required,” he said.
Adoption is accelerating rapidly.
More than 1,000 police departments around the U.S. are already using it. Insiders expect the other 17,000 law enforcement agencies will be quick to jump on board.
In short, the BolaWrap is the new, genuinely nonlethal tool in town. And it could grab a big chunk of Taser’s market share.
The company behind this new device is Wrap Technologies (Nasdaq: WRAP).
Since going public in 2018, annual sales have risen from a mere $23,000 to $10 million. Any time I see revenue growth like this, I lean in…
Full-year 2023 data isn’t posted yet, but it will be over $10 million, based on the last three quarters and a recent $5 million order.
Yet, despite this revenue growth … WRAP trades at just $3 a share. That’s lower than its IPO price!
Which is just one of the reasons why I’ve invested in WRAP, and think you should consider investing as well.
It could be the next 5,000% winner.
To put the opportunity in perspective, consider this.
While WRAP’s revenue growth looks strong at $10 million, it is TINY compared to Axon’s annual revenue of $1.2 billion.
Just think … if Wrap can gain just 10% of the market share from Axon … we’re talking about an annual revenue stream of $120 million. That’s a 1,000% leap from where it’s at now.
At that $3 stock could potentially shoot up to $30 a share.
But I think the opportunity could be even bigger.
There are reasons why…
First, international orders.
Taser guns were never adopted at a large level internationally. Apparently, foreigners are not too excited about shocking people with 50,000 volts of electricity.
This is a huge opportunity for Wrap. Sales abroad, in Europe, South America and the Middle East, grew 940% over the last year. And they’re still a minuscule part of the market.
The long-term potential here is massive. Wrap can dominate the international market without competition from Axon.
Secondly, Wrap is getting into the body camera market.
Police body cams are now common for nearly every officer.
Activists like it because it protects civilians.
Police officers like them because now people can see the full conversation … not just the edited recording of an intense fight.
A few months ago, Wrap acquired Intrensic, a company that makes the cameras police officers use and stores the data.
So, Wrap will make money selling the cameras.
But, more lucrative, is the storage of the data.
WRAP sells an online data platform that helps police collect and manage crime scene evidence.
That will be a huge time-saver for law enforcement and a money printer for WRAP.
Police may only buy BolaWrap devices once. But they would subscribe to digital evidence storage continuously.
Companies that can develop streams of recurring revenue tend to get the market’s attention in time.
The third reason I like Wrap is the management.
Besides the great product it’s developed and its methodical approach to rapid growth, over the last year, it’s loaded up on shares.
CEO Kevin Mullins just acquired 246,000 shares.
And Executive Chairman Scot Cohen just acquired 5.5 million shares.
Remember, company insiders have plenty of reasons to sell shares. They may need to diversify. They may need to pay bills. They may want to finally buy a boat and reward themselves for years of hard work.
But they buy for only one reason: They see shares as undervalued. And insiders already own 33% of the company. Further buys here look incredibly bullish.
Bottom line: At $3 a share, WRAP is a great price.
The company is tiny … valued at only $125 million.
Compare that to Axon, sitting at $18 billion.
It’s easy to see how shares of Wrap could move 10X higher from here. Maybe even 50X higher.
The story isn’t out yet. And Wrap’s market share is minuscule. Even grabbing 20% to 25% of the market, which I think is achievable in the next five to seven years, could make this company a runaway winner.
That’s why I see this as a 50-bagger — capable of 5,000% gains.
At its current market cap, that would mean Wrap gets a valuation of $6.3 billion. That’s still about a third the size of Axon. So, yes, that’s a realistic return in the years ahead.
To be clear: Wrap is a high-risk, high-reward investment. The stock price will be volatile.
But it’s an opportunity I see as too good to pass up.
Again, I own shares of this company, and I plan to reap the reward on it for years to come.
I love this company and what it’s doing to reduce casualties in police encounters. And its new technologies, like the body cam, will take the stock to that next level.
Which is why WRAP is my top stock pick for 2024.
By the way: If you decide to invest alongside me, shoot me an email at [email protected]. Let me know how much you decided to invest!
Aaron James
CEO, Banyan Hill Publishing and Money & Markets
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