On June 14, Colgate-Palmolive (CL) warned that it found fake toothpaste in bogus packages. It's part of a rise in counterfeit packaging that's attracting investors to Document Security Systems (DMC). The company has nine patented technologies to help protect documents and printed products from brand and security fakers. "The jump in such counterfeiting has called attention to Document, which specializes in optical deterrents that many companies and governments have started using," says Otis Bradley of Gilford Securities, who rates the stock a "strong buy." Document has the leading technology against counterfeiting and should see sales of $200 million in five years, says Vincent Carrino, president of Brookhaven Capital Management, which owns shares. Its stock, now at 12.41, should hit 50 in two years, he adds. In May, Document teamed up with Graphic Packaging (GPK), a Big Board-listed multibillion-dollar provider of paperboard for packaged food companies, to use its Authentiguard Technology. Charles Brignac, Graphic marketing manager, says customers want more protection from counterfeiting and brand fraud.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial