This spring I wrapped up my Dividend Snowball class with a demo of QuickFS.net, one of my favorite tools for researching stocks. After completing the demo I asked for stock requests to show the tool in action. I love doing this because I tend to stay locked into my limited universe of stocks. This exercise exposed me to stocks I’ve never looked at or ones I haven’t looked at in years. Three companies got my attention and went on my list to do further research. One stock went to the top of my list and that was Axon (AXON).
Axon is a fascinating company that operates in the public safety space. Right off the bat, I love their mission statement, “Axon is a mission-driven company with the overarching goal to protect life. Our vision is a world where bullets are obsolete, where social conflict is dramatically reduced, and where everyone has access to a fair and effective justice system.” No question, a lofty goal, but one I’d like to support with my investing dollars.
Axon’s Moonshot Goal “is to cut gun-related deaths between police and the public by 50% before 2033.” One of the ways Axon does this is through their Taser device, a non-lethal weapon that fires electrical probes rather than bullets. When the electric probes make contact with the target’s body it sends an electrical shock causing the muscles to stop working; allowing law enforcement to take them into custody.
Axon provides a line of body cameras police officers wear on their uniforms to record audio and video of all interactions. Once that footage is captured it is uploaded to Axon’s cloud-based software platform, Evidence.com. This is where evidence is securely stored until it needs to be retrieved and presented as evidence.
An exciting product Axon recently released is called Draft One. One of the least desirable tasks police officers face is writing police reports. That’s where Draft One comes in; it uses AI technology to extract information recorded by Axon’s body and in-car cameras and populates the police report. The police officer proofs the report, makes adjustments and signs off.
Axon’s CEO Rick Smith is also the founder. Not only does he have skin in the game, but his heart is in it too. He is incredibly motivated to drive innovation, keep our police officers safe and save lives in the process. Axon is one of my favorite companies and I can’t wait to share the full story this September in my new series called Spotlight Stock Reviews.
I was a late bloomer investing in Google (GOOGL), which is just how I’m wired. I don’t need to have the latest greatest gadget or trendy new product. I like to let everyone have their fun and when the cool kids get tired of them and the price drops, that’s when I strike. The only thing I had to have as soon as it came out was Atari as a kid. Who didn’t want to play Asteroids, Pacman and Zelda on their TV, right? Anyway, I didn’t see Google’s potential until the pandemic hit. Like all kids, my son Teddy was home continuing his education remotely. Naturally, I was curious to see how schools were going to pull this off. Teddy came home with a Google Chromebook. Lessons were taught through Google Meet (video conferencing) and Google’s YouTube. Assignments were emailed to his Gmail account. Google’s Chrome browser was used to access the Internet and he used Google’s search engine to do his research. Assignments were completed in Google’s suite of office products: Google Docs (Word), Sheets (Excel), and Slides (Powerpoint). It was the first time I saw a company loosen Microsoft’s firm grip on the office suite. Since Google’s office products were free, I questioned their quality; until I saw Teddy doing everything I would normally do in Microsoft Office. I love spreadsheets so I decided to put Google Sheets to the test. It passed with flying colors. I could upload an Excel file and open it using Google Sheets. All the formulas I used in Excel worked in Sheets. I was sold. I switched to Google Sheets and never looked back. I now prefer Google Docs over Word too. I’m not completely sold on Google Slides, but you can’t have it all.
The pandemic opened my eyes to Google’s brilliance. They may not be able to compete with Microsoft in the corporate world, but they are building a new generation of Google users from the ground up. Kids in grades K-12 are growing up in Google’s world. They will use Google products all throughout school and college. When they run companies or start businesses, they will gravitate to the tools they know and trust. When Google’s founders Sergey Brin and Larry Page said they were investing for the long-term, they weren’t kidding.
I’m just scratching the surface of what makes Google an amazing company. Google’s Chrome browser and Google search are the market leaders by a wide margin. Google owns YouTube which entertains us, educates us and maintains an extensive library of “how-to” videos. Google is betting big on its future too. They funneled over $47B into research and development last year. That’s funding moonshot projects like self-driving cars, artificial intelligence, healthcare technology and so much more. Google’s present is bright, but its future looks even brighter and that’s why I have Googley-Eyes.
College is a big investment. We started an ESA (Educational Savings Account) for Teddy when he was born. An ESA works like a Roth IRA in that you use post tax dollars to make contributions (up to $2,000 per year), the money grows tax free and you can take the money out tax free just so long as the money is used for education. Before Teddy became a chip off the old block I made all the investment decisions. The past few years I’ve been letting Teddy make his own investing decisions in his college fund. If he can’t go to an Ivy league school, that’s on him.
We recently reviewed his portfolio together to see how he’s doing. Most of his picks are doing pretty good. His big winner is META (the owner of Facebook, Instagram, and Oculus) which is up 188%. Teddy has an Oculus and likes hanging out with his friends in the virtual world; so it makes sense that he invests in companies he knows and loves. Personally, I’m not a big fan of the company and won’t buy the stock, but that’s not to say it’s a bad investment. META is an insanely profitable company and has worked out just fine for Teddy.
We can’t talk about a big winner without talking about a big loser. Nike (NKE) is Teddy’s big loser, down 30%. We talked about why the stock is down and what they need to do to get back on track. Teddy is doing his part to stop the slide in the stock price. He bought a new pair of Nike’s for school. We enjoy watching the Olympics and have seen many of the athletes proudly displaying the Nike Swoosh. Hopefully NKE’s stock price climbs with the medal count. Teddy added to his Nike position to reduce his average cost to $80 per share from $100.
Teddy has some money to invest so we took a look at Chipotle (CMG). He likes his steak burritos. Rather than have him read the annual report (because that surely would have scared the boy). I decided to have him read the Morningstar analyst report and highlight all the important points for us to discuss. We found the stock to be pricey, but we liked the fact that they plan to double the number of Chipotle stores to 7,000. Teddy jumped in around $50.
What a difference a week makes. Last week I didn’t have enough funds in my account to buy the company I was interested in. Rather than just investing in a lower priced company, I decided to save up another $100 and hope that the company was still trading around the same price. Thanks to a Monday morning sell-off in the stock market my patience was rewarded with a $10 drop in the stock’s price. The mystery is over and the company I had eyes for is none other than Google (GOOGL). The stock isn’t trading at a huge discount, but quality companies rarely get all that cheap. This is more like a giant stubbing its toe. Since I had some spare change left over, I decided to swing back into Bath & Body Works. The sale was still going on and the stock price got marked down some more. Kind of like Halloween candy after October 31st.
That’s all for now. We’ll see how Mr. Market feels next week.
Just as the Genie (Robin Williams) in Aladdin states, “there are a few, uh, provisos, a couple of quid pro quos.” I just finished writing the Navigator for the week and bought my share of Google, when I woke up to this podcast headline from the Journal, “Judge Rules ‘Google Is a Monopolist.’ If you’re interested in listening to the podcast, feel free to “Google It” while you still can. I listened to the podcast on my morning walk. The ruling doesn’t change anything for me. The judge hasn’t decided how to remedy the situation and Google plans to appeal. Meanwhile, I stand behind what I wrote above and plan to hold my GOOGL share. I still have Googley-Eyes.
That’s why I say, if you decide to buy any of the companies mentioned in the Navigator please do your own research or consult your financial advisor.
