Westy is telling everyone...unfortunately his share count is short by 7 million.When you look at some of the projections of Westergard and Otis Bradley our projections are starting to look rather conservative.
**Ask the Analyst:A Reader Asks for WBN's Interpretation of
Yesterday's Barron's piece on Identix (IDX 10 5/8 ASE)
For those of you who missed it, Barron's Alan Abelson threw a kudo to
IDX yesterday as an Internet stock, in his “Up and Down Wall Street”
column.
"Identix's stock had a pop recently, but Tony (Tony Pace,
hedge fund manager) insists there's plenty more where that
came from. The company has long been engaged in fingerprint
identification technology, and a recent acquisition has fortified
its stake in electronic fingerprinting devices.
"Tony's all alather about Identix's present and prospective
markets in computers, the Internet and smart cards, among other
buzzy areas. Revenues are modest but growing, and it even
earns a little money."
Westergaard Responds: You're on a rarely good wicket here, Alan, but I wouldn't call $100mm in revenues exactly "modest". The market for
keyboard biometrics in e-commerce and as replacement for passwords
and pin numbers is huge. Someone asked the other day, if all 100mm
keyboards shipped next year by the PC industry carried IDX biometric
technology and bought reader devices from IDX, what would sales be.
We checked in on that with Horace Flashman, our friend and grandson
of Sir Harry Flashman of the 17th Lancers, famous for leading the charge of the Light Brigade and various other Victorian fantasies. At present prices, according to Horace, which of course would not prevail, WBN estimates IDX sales would come to $5 billion. Assume 10% after tax on 23mm shares, and Horace estimates we're looking at $21.75 EPS.
The point being, of course, not that IDX is going to do $5 billion next year, but that biometrics related to computer ID and smart cards is at least a $5 billion industry down the road. Can IDX maintain its position as #1? On the equipment end, probably not. That will be a commodity business. But as the core supplier of software, the linqua franca of electronic identification so to speak, probably yes.
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