Biometrics industry stocks this week
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.
On Tuesday Google held a showcase to introduce its latest hardware. The company hopes to create a space for its products in the burgeoning ‘home IoT’ sector. Among the devices is a tiny camera, the Clip, that acts like a GoPro. Attach it something that moves, capture action footage, show off the video to friends. According to the presentation the new device also features facial recognition. Although the device seems to be targeted to a less demanding clientele than a high-end GoPro camera (think kids and pets rather rock climbers), shares in GoPro fell 5% the day after the Google presentation. Shares of GoPro have already fallen almost 40% this year as the market is flooded with new competitors. The new Google product will feature the company’s biometric product, FaceNet, which is an artificial intelligence program that can recognize people. A scientific paper recently released by Google suggests the technology achieves, “… state-of-the-art face recognition performance using only 128-bytes per face.” These systems are tested on existing databases of images. According to the Google paper, “On the widely used Labeled Faces in the Wild (LFW) dataset, our system achieves a new record accuracy of 99.63%. On YouTube Faces DB it achieves 95.12%. Our system cuts the error rate in comparison to the best published result by 30% on both datasets.” Has Google beat Facebook in the battle for the best facial recognition system? This is what Google claims; no wonder the stock continues to appreciate. Just this past week shares in the company climbed from about USD $962 before the hardware presentation to USD $982 late in the day Thursday. The amazing run-up in the company’s stock continues. Looking back Google shares were trading at just USD $800 at this time last year. It was only two years ago they were trading a bit above USD $500 a share. Google shares, of course, are part of the the so-called FANG group of stocks (along with Facebook, Apple and Netflix). As a group shares in these companies have powered ahead over the last two years, rising in price faster than broad stock indexes, which are themselves trading at record highs. The Dow hit yet another record high Thursday, jumping 113 points over the trading session to close at another record high of 22,775.39. At a time when many market watchers are worried about stagnating corporate earnings and reduced consumer spending as baby boomers retire in greater numbers (10,000 a day are retiring now, many of them broke), the S&P 500 just posted its longest winning streak since 2013–the broad market index has enjoyed eight days of advances, closing at 2552.07. Amazing. Let’s hope these valuations hold.
– Another company enjoying strong growth in its stock price is Korean chip and device maker Samsung. The company’s share price has been a remarkably steady and non-volatile performer for years. The share price moved sideways between 2012 and 2016. Since then the trend line has steepened and the company’s stock has been increasing over the last year and half. Shares in Samsung trade on the Korean stock exchange. But derivatives of the shares known as American Depository Receipts (ADRs) trade on the London stock exchange. They were up over 15% this week to EUR 1,164.00. Will the good times continue? An analyst recently pointed out that the company has one of the oddest relations in the corporate world. On one hand it’s making the handsets that compete against the iPhone. On the other hand it’s producing parts for the iPhone. The company manages this conflicted business model by deploying three different CEOs who manage different areas of the company as stand alone corporations. The part of the business supplying pieces to the new iPhone X should do well when that device hits the market next month. Sure, there may be less interest in this iteration of Apple’s flagship product — recent reports suggest head office is cutting orders for parts by 40% — but Samsung should still do well on that account. A major story in the Wall Street Journal estimates that the company will take in USD $110 for every iPhone X sold. The WSJ suggests Samsung will pull in USD $4 billion more in revenue from iPhone X parts than it will generate from sales of the Galaxy S8. Weird. Another interesting stat quoted in the WSJ article: “Apple and Samsung are expected to be the world’s two most-profitable companies in 2017, excluding Chinese banks…”.
– The flood of articles about the new iPhone X continue to jam media channels. One interesting quote from a report on financial news site Bloomberg quotes the CEO of FaceFirst, a software firm involved in the creation of the facial biometric system on the new Apple device. According to the company’s chief, Peter Trepp, the appearance of facial recognition technology on the Apple iPhone X has resulted in a flurry of phone calls as other companies inquire about the new and emerging technology. “It’s clearly coming in a very big way,” Trepp was quoted as saying.
– Not to suggest that fingerprint scanning is on its way out. Far from it. In the world of mobile fingerprint sensor technology Norwegian tech play, IDEX, is planning to host a ‘Capital Markets Day’ on November 2nd, 2017. The event will take place in London. Members of IDEX’s executive team will deliver presentations on the company’s technologies and outlook. Investors and journalists will be able to talk to management and try out demos. A report notes that this event will occur in conjunction with the release of the company’s third quarter earnings update. Typically companies do not schedule these kind of appearances and provide access to management unless the earnings report is expected to be positive, which seems to be the case here. The most recent update from IDEX (covering the first half of 2017) indicated that several customers are ready to sign up for its smartcard sensor, a product that has “billion unit potential” according to the company’s CFO. It will be interesting to see what the company announces. Shares in IDEX ASA are currently trading at about USD $0.81. We’ll check back in at the beginning of next month for an update.
– Brokerage ValuEngine announced this week it upgraded shares of ImageWare Systems Inc. from a ‘sell’ rating to a ‘hold’ in a research note published on Saturday morning. ImageWare is having a good month. Shares have had a strong September. Near the end of August shares were trading a bit above USD $0.90. Over the last two weeks they’ve really taken off, rising to USD $1.46 late in the day Thursday. The company’s 12-month low is USD $0.81, so it seems investors like the story at the company. Of late ImageWare has announced it extended its agreement with Fujitsu. There is also a new financing round worth $11 million. Most recently the company announced that it had received designated status as IBM PartnerWorld Ready for its GoVerifyIT Enterprise Suite. GoVerifyID has recently been updated with a voice-based recognition option, another up-and-coming technology in the biometric space. A recent news report from down under notes that the Australia and New Zealand Banking Group (ANZ) is implementing voice biometrics as the method of authentication in its call centres. A ANZ general manager was quoted as saying, “What we think we have found with voice biometrics as an addition to authentication is something actually that gives high security and a significant degree of convenience.” The manager was speaking at a conference on banking security and wondered if recent announcements about new biometric technologies being implemented by major global investment banks such as Barclays and HSBC could see the market, “… become too cluttered with disparate methods of authentication.” The ANZ manager went on to say he’d like to see financial institutions in Australia, “… work together to form a unified solution.” He was quoted as saying, “Every bank coming up with their own solution is probably not wise when you can have a standard response that is nationally utilized. Combining strong authentication coupled with secured credentials is the mission… We certainly have common interests as a banking community in implementing framework.” The manager went on to mention an approach that the Big Five national banks in Canada are taking. The Canadian banks have formed something called the Digital ID & Authentication Council of Canada (DIACC), which includes telecoms and governments, as well as financial service providers. According to the Aussie, taking a unified approach to biometric ID functions is wise. “I think that’s a really interesting combination. Not every country has managed to become that collaborative and I can see enormous benefits of having telcos and financial institutions with complementary datasets trying to solve national identity and security. I would hope the same thing might happen here in Australia,” the manager was quoted as saying. As it is, the central bank of Australia, the Reserve Bank of Australia (RBA) is launching a new payment platform that will allow near real-time settlement of transactions. The ANZ manager indicated he is worried the new shortened cycle time of transactions could lead to increased fraud. “Transactions that are set, cleared, and settled and posted within 15 seconds obviously offer you a much greater viability to success in fraud attacks as opposed to slower payment tracks that have been used in the past… We’re expecting an increase in the success of fraud just simply because of the velocity of transactions,” he was quoted as saying. ANZ is using a product from Nuance in its banking product that will allow payments over AUD $1,000 to be conducted based on voice recognition alone. The biometrics revolution continues.