One part of the bear case for ShotSpotter (SSTI) is that insiders are eager to dump their positions, and their selling will crush the stock. It turned out that company executives were eager and willing to BUY company shares. When it came time for a significant holder to sell, SSTI sailed through the event just fine.
Motorola disclosed the sale of 949,779 shares at $15.00/share on Wednesday, January 10. The sale caused a volume surge that at first glance looked like a washout of the last motivated sellers. An alert by the Canton ShotSpotter system resulted in the arrest of three men and the recovery of more than $5,000 of counterfeit money and multiple firearms. Total trading volume hit 1.4M shares, far surpassing any other trading day except for SSTI’s first day of trading. Buyers followed through by sending SSTI as high as 7% the next day.
The strong buying in response to the large sale is the good news from this trading action. From a technical standpoint, SSTI looks like it convincingly confirmed a breakout above its 50-day moving average (DMA). The next test will be the all-time high that followed the last earnings report and preceded the bear raid.
There is also recent good news from the implementation side. I found some encouraging stories from the good folks posting on SSTI on StockTwits that add yet more confirmation of the value of ShotSpotter’s system for detecting gunfire.
On the same day Motorola sold shares, News 5 Cleveland reported on a successful ShotSpotter implementation in Canton, OH. ShotSpotter was credited for an alert to police that generated “the arrest of three men and the recovery of more than $5,000 of counterfeit money and multiple firearms.” ShotSpotter was police’s FIRST alert to the incident and the responders were given information on the closest address on their way to the scene. A policeman interviewed for the story noted the value of having ShotSpotter’s ears on the scene when police cannot be present.
Stories like these are important as they continue to build the case for more and more cities to implement ShotSpotter systems as a part of crime-fighting efforts.
Back in September, the Sacramento city council approved funding for a ShotSpotter system in the Oak Park area after seeing the success the system had in the Del Paso Heights and Meadowview areas of the city. A Sacramento police officer was quoted some of the benefits:
“‘It’s a very accurate activation…Not only the location but the caliber of the gun, and it provides these officers with a lot more knowledge when they’re responding to a potentially violent situation.'”
From June 15, 2015 to May 31, 2017, ShotSpotter is credited with contributing to a series of success metrics including 89 arrests and 90 guns removed from the streets. Sacramento County also wants to allocate $1.1M to its own ShotSpotter system.
The momentum is building for ShotSpotter, and I am looking forward to hearing yet more success stories.
Be careful out there!
Full disclosure: long SSTI