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Why This Mid-Cap Stock Is a High-Conviction Hold

By Motley Fool Staff – Dec 8, 2021 at 7:45AM

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You might want to hear a bit more about what this company has to offer.

Investors, take note: Axon Enterprises (AXON -1.37%) continues to push the limits of its software solutions, expanding into several key areas over the last 10 years. 

In this "Industry Focus" video, recorded on Dec. 1st, Emily Flippen and Brian Stoffel examine a few of Axon's current offerings, and discuss how the company has transformed since its early beginnings as TASER International. 


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Emily Flippen: I love this company. When you reached out to me and said that this was a stock that stood out to you heading into the new year, this was also one that stood out to me -- one of my highest conviction holdings at this point in time. So, I think this will be a really fun episode.

I'm interested to hear your perspectives on this business. Without any further ado, what is this stock and why do you like it so much?

Brian Stoffel: Yeah, and it is one of my highest conviction holdings as well. The stock is Axon Enterprises, ticker symbol A-X-O-N, and if it's OK, I'll give a brief timeline of this company.

It was started in the 1990s as TASER International. So, the stun guns that you see police use, those are produced by this company. And it was known as TASER International for really long time. But, starting a little over 10 years ago, they branched out.

One thing to note is that from the very beginning, this company's mission has been to protect life. It's one of my favorite mission statements of any company I've covered. One way that they thought they could do a good job of protecting life was by developing body cameras -- Axon body cameras. So, they switched their name to Axon in 2017 to highlight that they were more than just the taser company.

But the real key from an investing standpoint is all of the software solutions that the company has been able to offer because of the body cameras and the tasers. For instance, they have products like, and that is where a police officer downloads his or her footage and then all of that footage is stored and it is searchable on -- searchable in ways that are almost mind-boggling to me.

They have Axon Records, which means that the paperwork that police officers fill out -- and I didn't know this, Emily, but police officers spend two-thirds of their time filling out paperwork -- and Axon, I think correctly said: Hey, relations between police officers and the communities that they serve aren't the greatest sometimes, and part of that could be that they're not in the community unless they're responding to an emergency. If they are in the community, and they're just part of it, that improves relationships.

So, Axon Records aims to use AI to auto-fill much of the paperwork based on the audio and the visuals that they get from the body cameras, and that reduces the amount of time spent on paperwork. The number of applications that they can use for the software is mind-boggling.

Just to put it in perspective, they also have Axon Dispatch, which allows a dispatcher to see real-time where everyone is. The way that I like to think about it is like 10 years ago when I watched the show 24, and you'd see where different people were when they were responding to a situation, it's similar to that.

I'm just going to throw this out there -- it is so useful that the country of Chile used one of these software solutions to monitor the supply chain of COVID vaccines in the past year. So, this isn't just for United States Police Departments.

Brian Stoffel owns shares of Axon Enterprise. Emily Flippen has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Axon Enterprise. The Motley Fool has a disclosure policy.

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