Biometric and Cybersecurity Equity Research - A shifting security landscape; access control and authentication continue to be one of the hottest if not the hottest sectors within security
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Boston, MA - March 19, 2014 (www.investorideas.com newswire) SoundView Technology Group: New report highlights SoundView’s recent participation and observations at a recent security and defense conference in New York.
We spent Tuesday, March 11th, tucked way back in a windowless conference room in NYC with a group of security geeks, company managements and investors. It's just the latest in what has been a multi-year effort to understand, follow and exploit a shifting security landscape.
There was widespread agreement that access control and authentication continue to be one of the hottest if not the hottest sectors within security . For instance as Secure Strategy Group tracks it this segment is up another 41% YTD after rising 140% in 2013. NXT-ID (NXTD) is one of the companies contributing to this record with the shares up 4x at $4.25 from their public listing in 2013 at $1/share.
NXT-ID provided an update of their Wocket smart wallet launch planned for this year which includes two pilots on college campuses while adding partners for the commercial phase to begin in the middle of this year. We expect that commercial results during 2014 will set the stage for the shares to move closer to our $11.51 intrinsic value estimate. Investors should also take note of their recent innovative and accretive financing. We ’ d love to see more non-VC backed companies to follow this example.
We got to see Dennis Raefield, the new CEO of Viscount Systems (VSYS - $0.13) present a clear case for the unification of cyber and physical security using their software and "bridge" technologies. We have followed and advised this company for some time and are intimately familiar with the technology and market opportunity. Up until now we were waiting for improved execution. Importantly for investors and the stock the company now has their wood behind the arrow in terms of sales growth and expects to double revenues in 2014 to between $7M and $8M. In his prior role as President of the access control division of Honeywell Dennis grew sales from $5M to $120M and we would expect the same sales trend to take hold at VSYS.
Viscount has enjoyed a good deal of attention from Microsoft who has made the company a certified technology partner and taken the additional and infrequent step of signing a revenue share agreement. As long as the company continues to execute this year we'd expect the stock to grow at least in line with revenues which would suggest a $0.20 - $0.25 share price this year. Visibility of continued growth in 2015 would allow for some multiple expansion and for VSYS to be trading at $1 in 2015. Our prior written notes and reports can be found at http://soundview.co/infosec.
According to some " drones are the next internet " although skeptics are quick to point out that all such arguments seem to leave out revenue models and most importantly profit margins and returns on invested capital. These latter aspects are what actually drove the real commercialization of the internet long after the bubble was gone. The lure of drones and other robotic and autonomous technologies is undeniable. (Persistent popularity and enduring discussion of " The Second Machine Age " is yet more evidence of the trend.)
There were no drone companies in attendance but investors saw the shares of the best public play, AeroVironment (AVAV - $37) , shoot up after news broke that Facebook was allegedly looking at a deal with drone-maker Titan Aerospace.
Our full report including other presenting companies is available here: http://s3.amazonaws.com/Published_Research/SV_Security_Update_March_2014.pdf
We are an independent advisory and research firm specializing in emerging technologies as they reach commercialization. Our proprietary research and modeling work provides valuable information for company management teams and investors in these emerging opportunities. We regularly publish our findings across a variety of channels including all the major retail and institutional information outlets. SoundView is based in Boston, Massachusetts with locations in New York and Connecticut.
SoundView analysts do not receive compensation for their research opinions, any specific views or conclusions. They are tasked to provide fact-based research with sound analysis. SoundView does not provide investment advice or make "buy/sell/hold" recommendations. Nor do we provide investment banking or brokerage services. We act as a publisher of our own research work and are responsible for all content. By way of disclosure we serve as advisors to two of the presenting companies, Viscount Systems (VSYS) and NXT-ID (NXTD).From January 2013 to July 2013 SoundView provided paid advisory services NXT-ID on their business plans, company description and investor positioning.
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Director of Research
SoundView Technology Group
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