Biometrics stocks this week: Goodix, BIO-key, Gemalto, ImageWare, EyeLock
An interesting article in the investing press this week notes that the broader stock market in America seems to be supported by, basically, tech stocks.
According to a piece in the well-respected weekly investment newspaper Barron’s, tech stocks have rallied of late and the strength in that sector has buoyed the S&P 500. The index has been gaining ground of late after some big sell-offs this past winter and spring. Recently the S&P 500 broke the 2740 mark. This represents solid progress, and not all that far off the all-time high of 2873 hit this past winter. Technology stocks are leading the advance.
According to the article tech-focused ETFs are hitting all-time highs. As well, the weighting of tech stocks in the overall broad market index has risen as tech stocks rise faster than the overall market. According to Barron’s tech stocks now represent 26.2% of the overall weighting of the index. That’s up from 24.14% at the beginning of 2018, and 20% at the start of 2017.
Some investment mangers warn investors to be on the lookout for a top in the market. But others say it makes sense to see tech stocks growing as they are. The economy continues to digitize. The brick and mortar retail sector continues to burn out. That’s leaving dead malls scattered across the North American landscape. But at the same time there are exciting new tech-enabled alternatives popping up.
Consider biometrics-based devices. Not only are smart cards and smartphones adopting biometric safety features, but the technology is being applied in many different areas, including the rapidly evolving commercial drone sector. Sure, traditional malls are going under. But people haven’t stopped buying stuff. They just do it in different ways now. And that’s where the booming drone sector comes in.
For those who haven’t been paying attention of late it might be interesting to note some recent advances in the drone sector. Amazon is already using biometric devices to facilitate deliveries into the home. The company expects to reduce porch thefts by allowing a delivery person access to their home. Homeowners will be safe in the knowledge that their biometric face ID sensor is able to confirm the delivery guy is the one the company sent. But this face ID tech will also find its way onto the delivery drones that are starting to come to market.
Way back in December of last year Amazon made its first drone delivery to a residence. A drone delivered a bag of popcorn and an Amazon Fire TV stick. But there are several other companies in this space. An outfit called Zipline has been delivering medical supplies in Rwanda by drone since October of 2016. Here in North America a publicly-traded company, Drone Delivery Canada (DDC), has just announced a new device that will be able to carry 400-pound pallets to remote settlements in Canada’s far north.
As it is, delivering goods in the far north is expensive. Food, fuel and goods have to be delivered by boat or plane in the summer, ice road in the winter. But the executives at DDC think they can do these deliveries for less by utilizing drone technology. Their latest devices, the Condor cargo delivery drone, is engineered to provide a pallet-load of goods over 150km. Said the company’s CEO in a press release distributed last week, “The Condor will be our first delivery drone that offers our customers a platform for greater capacities of bulk shipments. We continue to push the envelope advancing our fleets capabilities to meet and exceed client requirements in Northern Canada and elsewhere around the world.”
The company believes this to be a disruptive technology that will be faster, easier and cheaper than traditional delivery services according to the release. It expects free cash flow to increase almost 10% by 2019. It already has a market cap of $264.6 million. Investors seem to like the idea that the company is working with Canadian government ministries on its projects. The stock is up an extremely solid 84.4% over the last year. So these are good times in the drone industry.
Some other recent news from the sector: Sales of drones have just surpassed the $1 billion in revenue mark for the first time this year. The demand is coming from both hobbyists and companies. Amazon received a patent last August for a device that would allow a drone to “conduct a speech dialog with a nearby person in order to request information and/or answer questions.” The biometric-enabled speech recognition device could ask people to clear out of a drone delivery space, or ask a customer to “ask the AV to postpone delivery.” So the technology is evolving rapidly. No wonder then that a recent article in the Canadian press notes that drone schools in British Columbia have seen registrations double this year as new regulations from Transport Canada that are expected to kick off the commercial drone industry soon come into effect. Says DDC CEO Tony Di Benedetto, “We are quickly advancing our technology out of the lab and into the skies. This begins with DDC providing a logistical solution for remote communities where infrastructure is limited or non-existent. The opportunity to help drive social and economic betterment to these communities by deploying our drone deliver platform is evident and with approximately 1000 of these communities across Canada’s north. We see this region as a great opportunity for us.”
Some of the other interesting news from the biometrics sector this week:
Goodix announced that its latest optical in-display fingerprint sensor and capacitive fingerprint sensor will be featured exclusively on the vivo NEX smartphone. According to the press release, the new sensors feature higher resolution with an optimized optical stack design and improvements in fingerprint image accuracy and unlock speed. Goodix is a China-based company. The official title of the company is Shenzhen Goodix Technology Co. It is working on wearables and devices for the IoT and smart phone market. It was also recently made a part of the Samsung manufacturing chain. And while shares in the company are trading down from last year, the shares (trading in China under the stock code 603160) are hanging in around around CNY 71.29.
BIO-key is emerging as an important name in the biometrics-based lock market. The company has just gone to market with various locks that require a fingerprint to open. The company recently reported that the first revenues from these products are streaming into the company and on to the bottom line. It seems bigger companies are beginning to take notice of the success of its products. This week BIO-key announced that it has entered into an agreement with Asahi Cycle for the distribution of biometric-enabled bicycle locks in Japan and throughout Asia. A press release quotes Wong Kwok Fong, managing director, BIO-key Hong Kong, as saying, “Bicycle theft is a rampant phenomenon in large cities, and BIO-key’s innovative bicycle locks offer a robust and convenient solution. We look forward to working with Asahi to support additional bicycle lock sales and to expand awareness of this solution across Asia.” Asahi Cycle runs a chain of 450 bike stores in Japan, with a couple in China. It controls 17% of the retail market in Japan, which is impressive market share. The company’s shares trade on the Japanese stock exchange. It is not related to the brewer, Asahi. Shares in BIO-key are trading around USD $2.39 this week.
Gemalto announced this week that its Live Face Identification System (LFIS) performed exceptionally well at the 2018 Biometrics Technology Rally. The event is sponsored by the U.S. Department of Homeland Security’s Science and Technology Directorate. The event provides an opportunity for the government agency to get a sense of what products are in the market and what they can do. For this competition twelve companies were selected to, “… showcase facial recognition technology that addressed the growing challenge of traveler identification and automated border control,” according to a press release. The entries were evaluated for, “… efficiency, satisfaction, and effectiveness and each company had to meet several listed requirements such as time restraints, unmanned operation, and limited physical footprint.” According to the press release Gemalto’s face ID system outperformed the average range for most metrics in addition to a 99.44% successful acquisition rate in less than five seconds compared to the average of 65%. The senior vice-president of federal government sales at Gemalto, Neville Pattinson, was quoted as saying, “We’re thrilled with the outstanding results our solution achieved at the 2018 rally.” No kidding. Contracts with Homeland could potentially be massive. Said Pattinson, “Given the success of LFIS, we see this as a secure and efficient solution for government entities to interact with citizens. It can also revolutionize the air, land and sea passenger, international border, and security checkpoint experiences with increased security and added convenience to travelers.” Shares in Gemalto continue to trade at just about EUR 49.98 which is just about the price being offered for outstanding shares of Gemalto by French tech concern Thales, which is in the process of acquiring Gemalto.
Another bit of news from the world of biometrics stocks this week: ImageWare announced it will debut its “medication adherence and patient engagement” product, pillphone, at America’s Health Insurance Plans Institute & Expo 2018. Pillphone is a neat technology. Utilizing sensors and smartphones doctors can ensure remotely that a patient hast taken medication as prescribed. “The pillphone is the only FDA-cleared mobile application for medication reminders and information exchange over a wireless device,” said Tom Evangelisti, director of digital health, ImageWare. “Our communication platform connects and supports healthcare providers, family caregivers, and patients when they are outside of the medical facility. It streamlines workflows and improves care team communication and collaboration with patients by offering personalized, two-way interactive, secure messaging and real-time remote medication monitoring.” ImageWare will also demonstrate the latest versions of its biometric user authentication for healthcare systems. Shares in the company are trading about USD $1.44 this week.
EyeLock announced this week that it has hired Nick LaBella as its new vice president of sales. The new hire is part of the company’s plan to grow its business in the biometrics-based access control market. According to the press release, LaBella will initially focus on the upcoming launch of a ruggedly built sensor design for use outdoors, the Nano EXT. The device is water and dust resistant and is built to withstand large impacts. It is also designed to be compliant with the Americans with Disabilities Act Standards. It can scan users from a distance of 19-24 inches, and is designed to automatically adjust its height. In a statement announcing the device, EyeLock highlighted its applications in outdoor environments as well as “data centers, banks, factories, industrial facilities, and office buildings. EyeLock is a subsidiary of consumer electronic conglomerate Voxx International, which is trading up this week at USD $5.85.