Watch for updates from:
seekingalpha.com.
Expecting Update Report by end of the week:
WE WILL FOLLOW UP WITH ANOTHER REPORT LATER THIS WEEK -- Digital Ally shares are up 33% since coverage ramped in early March.
WE REITERATE OUR STRONG BUY RATING.....
Original Report
are initiating coverage on Digital Ally (NASDAQ:DGLY) with a buy rating and a 12 month price target of $10, reflecting ~40% upside from the current price. Our investment thesis is driven on Digital Ally’s explosive top line story that has barely begun to scratch the surface of its market potential. In addition, we expect Digital Ally, which was just listed on the NASDAQ, to capture the attention of boutique research shops as its run rate expands and the company begins to sign higher volume contracts. DGLY is one of our top microcap ideas for 2008. Investors who remember the “out of nowhere” explosive appeal of Taser (NASDAQ:TASR) would be wise to investigate DGLY a bit further.
Investment Thesis
DGLY is a small company looking at a massive market opportunity. Currently, the DVM 500 rear view mirror product carries a $3995 price tag – it is their best seller and is priced ~$1,000 below their competitors. Currently, most police departments are running analog/VHS video systems in patrol cars; our checks indicate that they are looking for digital solutions, but have not yet made the full scale transition to digital.
1) Sales have really taken off since the company added a wireless file transfer capability. The product’s wireless option allows the vehicle to automatically download all recorded files directly to the police station once the patrol car enters a hotspot area.
2) The rear view mirror product has a constant 60 second recording, as well. The device automatically goes into full record mode when the police car sirens are turned on. The product has the ability to go back 60 seconds (pre event) prior to the sirens being flipped on to see the event leading up to turning on the sirens - such as running a red light, etc.
3) Lastly, there is a feature that is called 'Mark' so that when a police vehicle is following a car and something is thrown out the car, for instance, the officer just hits the 'Mark' button. That feature makes it much easer to search for the material later as the geographic coordinates are established during the chase. If you’ve ever watched something like America’s Wildest Car Chases on TV, you can emphasize and understand what a vexing issue this has become for police officers trying to do a million things at once. |
