A Shifting Security Landscape; Access Control and Authentication Continue to Be
One of the Hottest if Not the Hottest Sectors Within
BOSTON, MA -- (Marketwired) -- 03/19/14 -- 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
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
(OTCQB: 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
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
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
Conference Info: http://www.investorideas.com/Conference/
About SoundView Technology Group
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.
Any questions please contact:
Director of Research
SoundView Technology Group
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