October 12, 2017 -
As the biometrics industry continues to grow, Biometric Update is bringing a new focus to the stories around the stocks in the sector. Check in with this space each week for a rundown of the financial news and interesting ideas from the week that was.
Stock markets continue to trade at record highs. Financial analysts point out that broad market indexes have not suffered a decline of more than 3% since November of last year. The last time there was a stretch of such low volatility was in the mid-1990s. But the debate about whether or not these valuations are sustainable continues to heat up. This past week the most recent recipient of the Nobel Prize in economics, Richard Thaler, was quoted as saying that investors seem to be complacent about valuations. “We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping. I admit to not understanding it,” the University of Chicago professor was quoted as saying this week in an interview with Bloomberg. Other analysts note the valuations make sense in light of some of the good news emerging among various economic indicators tracking the course of the underlying economy. Among the positive indicators of late: Manufacturing activity is at a 13-year high, service sector activity is up and intermodal rail traffic is strong. All in, the indicators suggest a stable economic outlook according to some. European investment bank Credit Suisse released a strategy report predicting the S&P 500 will continue to rise through 2018, so there are some betting this bull market has a way to go yet.
Within the biometrics sector there is some good news. A couple of companies reported that the so-called ‘short interest’ in their shares declined. Investors, of course, can take positions in a stock that allow a return to be generated as the price of a stock drops. This is done by borrowing shares from a brokerage, selling the shares at a higher price and then buying them back at a lower price (assuming the price of the stock declines). The brokerage that ‘lends’ the stock charges a slight amount, while the investor trading the shares makes a profit if the stock price drops. The technique is known as ‘shorting’. Stock exchanges gather and publish information on the number of shares lent out to short sellers. Recent data notes that the number of shorted shares in both Fingerprint Cards and SmartMetric fell between two and ten percent. This is considered a positive sign, as fewer investors are betting on shares in these companies to fall.
Shares in Fingerprint Cards are trading around SEK 22.43 this week. SmartMetric shares are were trading hands at USD $0.06 at the end of the day Thursday.
-A couple of interesting stories popped up this week about the use of biometrics in the healthcare sector. Many wonder why the benefits of digital technology have not been more fully deployed in the healthcare industry. Security is one reason. It is assumed biometrics-based technologies will be key in meeting the security challenge in healthcare. A report on biometrics in healthcare published on Biometric Update earlier this year predicts revenues in this sector will expand to USD $5 billion by the year 2020. How it is biometric technology will fit into the healthcare sector can be discerned in some recent announcements.
This past week the FDA announced it would lower some “regulatory barriers” for tech companies hoping to develop digital technology-based solutions for medical uses. According to a media report, the FDA announced suggests that companies like, “Apple, Alphabet and Samsung are making long-term bets on the medical sector.” According to the story, companies that are making wearables will begin moving beyond simple fitness applications to medical uses. Apple is said to be researching the possibility of having the company’s watch detect a heart rhythm disorders and blood glucose levels. The idea of wearables as medical equipment is interesting.
A company called Welbie in Ottawa, Canada was featured in a local news report this week. The company is working on an app that takes data from biometric-based wearable devices like Fitbit, Garmin and Apple and detects patterns in the data. According to the story the data collected by these devices can be sorted into a profile of an individual’s vital signs regarding day-to-day stats like heart rate, physical activity, weight and blood pressure. The data can be monitored by those tasked with looking after, say, an older relative, as a way of keeping an eye on the health of loved ones. By monitoring the data from these devices changes in basic patterns can raise a warning and alert caregivers. As baby boomers retire in ever greater numbers these are the kinds of technologies and applications that will be in demand in the years to come. A Statistics Canada report mentioned in the story notes that longer life expectancies and an aging population have expanded the number of people who are looking after an aging relative. The home health-care and remote patient monitoring sector is an “increasingly crowded field” as a result. Some other companies from the Ottawa region said to be working in this area include Aetonix, Mobile Wellbeing, eCare21 and Care|Mind.
Qualcomm Life also announced it is working on a new biometric “patch” aimed at the remote medical monitoring market. The patches have been developed through a special program the company has instituted to streamline the development of FDA and HIPAA compliant technologies. In a statement the Qualcomm subsidiary said the patches can track “a variety of biometric parameters,” including motion detection and temperature assessment. They are designed to deliver real-time data. A licensing agreement with Benchmark Electronics will see that company design and manufacture the devices. According to a Qualcomm Life press release the biometric patches are currently undergoing clinical testing and are expected to be delivered to market next year.
Another bit of news from the healthcare sector: Next Biometrics Group this week announced that the company has signed an agreement with a German distributor of biometric authentication products, MATRIX GmbHd. The agreement covers Germany, Austria and Switzerland. According to the press release, “MATRIX will sell the NEXT line of USB fingerprint peripherals… to its wide base of customers and partners targeting banking, insurance, point-of-sale and healthcare markets…” The company will offer the NEXT fingerprint authentication system in these regions. ”We are excited to be able to offer NEXT solutions for our broad customer base,” said Malte Kahrs, CEO of MATRIX GmbH. Among the clients of MATRIX are medical centers and public administrations. NEXT is currently trading at about USD $9.72.
-Another interesting story this week involved the cryptocurrency Bitcoin. The value of a single Bitcoin spiked to a new record high of $5,223 by the middle of the week. It was up 8.5% overnight Wednesday in European trading. It is hard to say where the renewed interest in Bitcoin is coming from. One analyst said that money invested in other lesser-known digital currencies had migrated back to Bitcoin over the past few weeks (Bitcoin is the oldest of the now numerous cryptocurrencies available to investors). Another report suggested members of the United States Congress are preparing to submit a proposal for a bill that would protect cryptocurrencies against interference from the U.S. federal government. The thinking seemed to be that legislation would define Bitcoin as a currency (and not as an asset or security), which would mean that capital gains in the currency could not be taxed. Enshrining that status in law would do much to increase the appeal of Bitcoin to mainstream investors. It has also been reported that the Chinese government is considering easing regulations on cryptocurrencies, while major U.S. investment bank Goldman Sachs said it is exploring how it could help clients trade in cryptocurrencies. The sum reaction was the big spike in the price of a single Bitcoin. This renewed interest in Bitcoin has to be good news for digital security giant Gemalto NV, which recently announced it was working with hardware wallet provider Ledger to create a new secure storage product for financial institutions working with cryptocurrencies.
According to a press release the new partnership will see Ledger’s hardware wallet operating system (BOLOS) combined with Gemalto’s cryptographic key storage system (HSM) to provide a secure environment for financial institutions looking to leverage cryptocurrency. The solution enables a variety of use cases, “… such as launching investable products on cryptocurrencies, or stocking cryptocurrencies securely,” according to the release. Eric Larcheveque, CEO at Ledger, was quoted as saying, “As the market value of blockchain based solutions rises, so does the need for bank-grade security products, when financial institutions are looking for dedicated, certified solutions.” Todd Moore, senior vice president of encryption products at Gemalto, noted the Gemalto-Ledger partnership could extend into “smart energy applications, home automation or wearables.” The release went on to say that clients can, “…customize account-based digital signature policies, heightening security requirements for user authentication of these transactions.” Most interestingly the release also noted that cryptocurrencies now boast a market capitalization of USD 137 billion. This still far off the market capitalization of gold (at USD 7.8 trillion) and the total market cap of the stock market (USD 83.8 trillion). But the market is growing fast. Shares in Gemalto NV were trading off a bit at EUR 16.21.