Struthers Report Recommends VSYS as well. This is excerpted from the full post over on Raging Bull:
ragingbull.lycos.com
My email to you has been quiet for a week, but I have been busy. Below is a market update and Future Tech report in plain text. I also attached a chart on VSYS 'vsys.gif', probably my last Nasdaq OTC pick for this year, most others with be Nasdaq listed.
Struther's Future Tech Report - VSVY Volume 6 #4.0 Apr. 15 2002
4-1565, 16th St. E. Suite #221 Owen Sound, Ontario, Canada N4K 6X8
Web Site playstocks.net resource@bmts.com
Yearly subscription $169 cdn/year $119 US
***************** New Pick and Updates ******************
When I was researching security stocks, I was also looking at Viscount Systems, VSYS. This is another excellent security company but I chose SETP first because it appeared cheaper and looked like it would move up in price first. However, the market has been weak and SETP has drifted down about 20% but Viscount has moved up 10%. I thought we may get a pull back with Viscount but the chart looks good and it appears it may keep going higher. The stock is a new listing, not known at all, but I expect we will see new developments that should increase its exposure.
It makes a lot of sense to diversify with a couple of these security stocks, so it is another reason I am adding it to our list now. Because the stock is on the move, I would use my usual strategy, by purchasing an initial position at current prices and if we do get a pull back, I would then add to the position by averaging down. If the stock keeps going up, at least you have a position.
Viscount Systems, VSYS on Nasdaq OTC Recent Price US$1.65
Trading range since inception $0.74 to $1.75
I would buy at current levels Stop/loss $1.30
Shares Outstanding: 15,000,000
Fully diluted: 16,225,000
Management/Insiders 67%
Float approx. 4 million
Overview & History
Although Viscount is a new public company, it has been in business for over 30 years. Viscount Communication was formed in 1969 as a manufacturer of video switching equipment. In 1970, it was acquired by B.C. Telecom Inc. (BC Tel), recently renamed Telus Corporation. BC Tel was the telephone utility for British Columbia controlled by GTE Corporation (now Verizon Communications Inc.). Under BC Tel, the business operated as an electronics research laboratory and manufacturing facility.
BC Tel sold the business in 1997 and subsequently the current management group gained control the same year. Since that time, Viscount has achieved profitability with an annual revenue stream over $3 million per year, with gross margins typically between 45-55%.
The company manufactures and sells a complete line of electronic door access products for the building security industry.
The Security Industry is now estimated at US$18 billion/year with the $1.4 billion door control access space one of the largest & fastest growing sectors of the industry.
Security spending remains strong as a result of the:
. rising value of intellectual property
. continued theft of costly company assets
. rising threats of workplace violence and terrorism
. upgrading of older security systems using new products
and services.
Management
The management group has a combined 60 years experience relative to their industry.
Steve Pineau - President & CEO, BA in Economics. Mr. Pineau was account manager with Viscount from 1991 to 1995 where his primary focus was building the company's US dealer network. He then formed Blue Mountain Technologies, a private company that became one of the largest installers of integrated security systems in British Columbia, prior to returning to Viscount as President in 1997.
Greg Shen - Chairman, holds a Masters degree in Engineering. He was previously Production Manager with GTE subsidiary Telus Microtel prior to co-leading the buyout in 1997.
George Drohomirecki - Engineering Manager, holds a Masters degree in Electrical Engineering and was previously senior engineer with Honeywell-Measurex prior to joining Viscount in 1999.
Viscount Systems has an established dealer network of over 500 partners that currently have Viscount products installed in over 35,000 buildings across 30 countries worldwide. Recently a distribution deal has been signed with Honeywell and Viscount maintains strategic alliances with industry leaders Tyco International/ADT, and Siemens.
What I believe makes Viscount an excellent investment at this time is their strong presence and history in the security market that is now gaining a lot of attention and growing strongly. Secondly, Viscount has just announced an exciting new product, called MESH. Thirdly, the trading pattern on the stock chart looks bullish.
Products
The company's principal product is the Enterphone 2000 intercom and access control system. Enterphone is a patented building entry control system that uses a building's internal phone wiring to allow access control for tenants and intercom. This product currently accounts for approx. 70% to 80% of Viscount's revenue stream.
Enterphone, originally developed by BC Tel in 1965 is a specialized telephone switch used to provide intercom and access control functions in high-rise buildings. With increased security awareness in buildings over the past several years, Viscount is now providing a more comprehensive package of complementary products. Products packaged, using third party technologies for this purpose, include card access systems (EnterChek), radio frequency remote controls (RadioClik), intercom display panels (Elektra) and closed circuit (CCTV) cameras.
In 1990 a typical condominium building would be equipped with an intercom to admit visitors. Today, a new building installation includes telephone entry, card access, CCTV cameras, individual burglar alarms and panic stations. This puts pressure on manufacturers to provide a comprehensive package and represents an opportunity for significant revenue growth per system.
Since 1998, Viscount has been developing a new integrated platform for building access control and management. The first in a series of new products is now complete and was recently announced under the name MESH. This is a breakthrough opportunity for Viscount and has the potential to re-define the electronic door control market.
Viscount's MESH - multimedia embedded security hub, is designed to replace the existing and obsolete industry standard, and thereby redefine the electronic door control market. This patent pending technology is considered the first PC based platform that improves security and safety, reduces consumer costs up to 80% and increases margins for the industry.
Most current access systems are based on stand alone technology, meaning they are programmed individually and run through a hard wired system usually attached through a central switch or electronic board. This compares to Viscounts new MESH system that runs on a network and is computer/software driven. This greatly simplifies, installation, maintenance and day to day operation.
About 90% of the world's installed access systems are based on a 30 year old technology called "Wiegand". These systems are commonly found in buildings in the form of access control cards and card readers. Wiegand technology has established itself as the industry standard as it is viewed as being reliable and difficult to counterfeit the access cards.
Wiegand technology requires card readers that are connected to a host controller that can operate between one to eight doors. A building with a large number of access points could require a large number of hosts.
The limitations and hardware requirements of the traditional systems spelled 'opportunity' to Viscount. Hence their development of a "intelligent" access control and communications system, MESH. This allows several independent systems, such as intercom, access control, video, and climate control, to be controlled by a single server. These systems are based on software designed to control hundreds of readers from a single computer server, combined with "smart chips" installed in readers at each controlled access point.
Viscount's new MESH system can handle all other aspects of security information - audio, for intercoms - and digital video. One new system handles all three data inputs and gives management much more relevant information about their building, while reducing costs dramatically.
This is not only a great security system but a compelling value proposition for customers. It won Viscount Systems rave reviews recently at the largest security dealer show, the International Security Conference West in Las Vegas.
This new MESH system is what will drive Viscount to their next stage of growth. The product is modular and can easily be expanded and upgraded to take on more tasks. These could include asset tracking to prevent theft from a building of such things like computers, photo-badging software to allow digital photo-imaging of individuals accessing a building, or controlling lights and air conditioning when an area is accessed.
Future product lines could include readers based on Viscounts own infrared system, biometrics, radio frequency and any other reader type which appears to have potential.
Finance
Viscount has no long term debt and approx. $2.5 million in working capital. Last years revenue was $3.3 million with a small $128,000 profit.
The company is well established and with its newest product already developed, Viscount should have adequate funding for it's next stage of growth.
Summary
I think this news release on April 9th sums up the potential for Viscount very well and gives the companies new product a strong vote of confidence.
************* NEWS ****************
BURNABY, British Columbia, Apr. 9, 2002 (BUSINESS WIRE) -- Viscount Systems Inc. ( OTCBB - VSYS ) President and CEO Stephen Pineau is pleased to announce The Company has received a US government funded order for the 21 building Nassau Gardens complex in Norwood, Massachusetts.
The project will be installed by Viscount dealer Alarmex Inc. and is funded by the US Department of Housing and Urban Development (HUD). "In the building control business, reliability is what really counts" mentioned Mr. Dick Crosson, President of Alarmex. "We have been a dedicated Enterphone dealer for over 10 years because the quality of Viscount products always makes us look good."
Mr. Crosson is one of a handful of dealers who have had a preview of Viscount's new MESH system. "As an expert in the fire alarm and security business, I can see what Viscount is doing is very exciting. The potential of the product is enormous and I can't wait to be involved," continued Mr. Crosson.
"Alarmex is one of our long and most valued customers," noted Mr. Pineau. "The combination of such a strong distribution network along with our powerful new MESH system will be very formidable."
***************************************
The stock did not react to this news as I don't think it
is well known as a public trading company, at least not yet.
Resource Stocks Advisory & Struther's Future Tech Report
4-1565, 16th St E, Suite #221 Owen Sound, Ont. Canada N4K 6X8
519-374-9332 Fax 519-372-9621 Editor: Ron Struthers
Email resource@bmts.com Web "http://www.playstocks.net"
Investment Opportunities & Strategies in the Markets for Tomorrow |
