The Hottest Tech Market Since the Dawn of Cyber Security
If you have a family, you know how critical maintaining a certain level of security can be.
Bolstering your home security system, for instance, can save your life in a tough situation.
But what you might not realize is that securing digital data can be just as lifesaving.
Consider the theft of nuclear secrets from a government building. That information can later be used to make deadly weapons.
Seem far-fetched? Think again. It’s actually happened before.
No wondering reinforcing cybersecurity is a top priority for the government.
Trump plans to release an executive order soon that will revamp the government’s cybersecurity initiatives.
And the Federal Trade Commission (FTC) is offering a $25,000 prize to anyone who can help shore up vulnerabilities involving the Internet of Things (IoT) trend.
Plus, thanks to the rapid pace of innovation and increasing affordability of security technology, the type of breach described above can be thwarted more easily than ever.
In fact, we’ve identified a company that’s leading the way in modern global security tech.
And it’s currently trading for less than a latte at Starbucks.
Senior analyst Jonathan Rodriguez has more details on this play below…
A $145 Billion Market Flying Way Under the Radar
In the face of increasing threats to sensitive data, the security industry is growing at breakneck speed.
The lion’s share of investor capital flows into cybersecurity-focused companies these days, yet the need for security goes far beyond cyber.
Organizations must safeguard the buildings where sensitive data are generated and stored.
In fact, research firm MarketsandMarkets estimates that the global critical infrastructure protection market will be worth $144.8 billion by 2021.
Of course, you can’t use a standard door lock to secure these buildings.
That’s where electronic access control systems, or EACs, come in…
EACs limit access to a facility based on specific factors programmed by stakeholders.
Using these systems, people gain access through RFID (radio wave) fobs, electromagnetic cards and biometric scan.
What makes EACs superior to traditional “lock and key” facilities management?
They’re fully audited. No one gets in or out of a facility without being logged.
Credentials can be updated instantly on the fly to add new users quickly — or restrict them as needed.
And all of the security management software and credential data are stored in the cloud. This means that stakeholders can make any changes securely from anywhere in the world.
Some of the biggest players in the infrastructure security game include Honeywell International Inc. (HON), General Dynamics Corp. (GD) and BAE Systems PLC (BAESY).
But with market capitalizations of $90 billion, $55 billion and $23 billion, respectively, these huge companies aren’t primed to capture the bulk of this industry’s rapid growth.
Here’s a more exciting play on the action…
Go Small to Gain Big
Based in Santa Ana, California, Identiv Inc. (INVE) has been providing high-end global technology solutions for more than two decades.
The company, which trades for less than $4 a share and boasts a growth-friendly market cap of just $38 million, specializes in the security of things — data, physical locations and objects.
Its product line includes electromagnetic key fobs, RFID transponders and smart-card readers.
But what puts Identiv on the physical security map is its Hirsch facility access management controllers and software control system.
This modular, scalable system includes door and gate controls, which can be used individually or as part of a larger interconnected network.
Clients can also manage Hirsch controllers with Identiv’s own Velocity software, or use their own.
The company’s got some big-time clients, too.
Identiv, in collaboration with NXP Semiconductors NV (NXPI), was selected by the renowned tech conference CES to provide badges equipped with RFID inlays to the conference’s more than 170,000 attendees this year.
The badges not only authenticated attendees at the Las Vegas-based conference, but also allowed them to ride the monorail and gain access to bike-sharing programs.
With a brand-new line of connected devices on the horizon, insiders and institutional investors alike are loading up on shares.
As you may know, insider buying is often a bullish sign of conviction in shares.
Identiv chief financial officer Steven Finney purchased 80,000 shares in the third quarter of 2016.
Small-cap fund Royce & Associates LP also scooped up 120,000 shares last quarter, bringing their total position to 5.4% of shares outstanding.
Security tech investors would do well to follow the smart money here.
Bottom line: Cybersecurity is not the only way to play the lucrative protection market. Infrastructure protection is a much cheaper ticket to the dance. And Identiv is well positioned to catch this growth in 2017.
On the hunt,
Senior Analyst, Wall Street Daily