The day after ShotSpotter (SSTI) reported earnings last month, the stock gained 6.4%. The buyers returned for the next four days to confirm a breakout above resistance at the 50-day moving average (DMA). SSTI closed the week up 32.1% post-earnings, and the stock looks like it finally wants to bottom. The 50DMA is turning upward and looks ready to support any pullbacks.
Source: FreeStockCharts
Along the way, a bi-partisan bill in the House of Representatives gave ShotSpotter a boost without calling out the company by name. On November 19th, Congresswoman Robin Kelly (D-IL) and Congressman Jim Sensenbrenner (R-WI) introduced a bill called the “Gunfire Detection and Location Technology Act.” Spoken from ShotSpotter’s playbook ShotSpotter, the press release described the technology as follows:
“A network of sensors is used to detect gunshots, many of which are unreported to 911 dispatchers. Once a gunshot is detected, the technology triangulates the origin and notifies law enforcement with real-time data. This increase response time allowing for speedier access to victims and rapid securing of the crime scene. Additionally, the data can be used, via a secure database, for predictive intelligence, which further improves response times and resource allocation.”
Both Kelly and Sensenbrenner are quite familiar with ShotSpotter. Kelly’s district is in Chicago, a city which is a long-time customer of ShotSpotter. Sensenbrenner’s district is in Milwaukee, a city with a ShotSpotter installation first implemented in 2010. The press release even includes a link to an article announcing Milwaukee’s expansion of the ShotSpotter intallation:
“The effectiveness of ShotSpotter, a gunshot detection technology, is difficult to measure. However, the technology did indicate there was a 38% decrease in the amount of gunshots fired from 2017 to 2018 in the areas where the technology is used in Milwaukee.
The Public Safety and Health Committee accepted a $175,000 grant for the Milwaukee Police Department to expand the program Thursday morning. The technology, which uses multiple acoustic sensors within an area to triangulate where a gunshot was fired, has been used by the Milwaukee Police Department since 2010.”
Given the small size of the grant and the uncontroversial crime-fighting aspect of the bill, I fully expect the bill to pass through the acrimonious Congress and embattled President. The bill will provide much needed funds to communities get projects going that demonstrate the value of larger implementations. The bill proposes allocating $40M over four years to communities across the country.
The momentum is once again growing for SSTI. At one time I thought I would declare SSTI my stock of the year for 2019. SSTI will be lucky to end the year flat, but hopefully the lower pricing is a firmer launching pad for 2020.
Be careful out there!
Full disclosure: long SSTI