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  • Document Securities Systems (AMEX: DMC) Making Progress
    US Corporations have begun to drastically increase their spending on “Brand Protection” and anti-counterfeiting solutions.  DMC should be seeing top line growth. This should help the bottom line and turn DMC profitable in the near future. Through its technology, the company is uniquely positioned to benefit.as several industries seriously increase their spending on secure product identification solutions.   DMC could become a takeover candidate without profitability, but profits would improve any price paid.
     
    Good news:  in the most recent (June) quarter, the company did achieve positive cash flow from operations.  There have been several other positive developments reported:
    ·         A licensing agreement with ATL, Inc., a major supplier of pharmaceutical packaging, was announced with Q2 2010 results.  This could bring in high-margin licensing revenues.  Counterfeit drugs accounted for 10% of the drugs sold in the U.S. as of the last report I’ve seen.  This represents a huge loss to the pharma companies, and they are beefing up their packaging security.
    ·         Several developments which make the company’s  AuthentiGuard® technology more available:  compatibility with both Microsoft and Apple systems, as software as a service version and a cloud computing version, also reported with Q2 2010 results.  Software margins are attractive, and this should be an avenue for good growth.
    ·         A new patent award in Europe.
    ·         Several large orders recently announced:  Walgreens renewing a contract for $2.7 million, and a new customer placing a $600,000 contract.
    ·         Progress in integrating higher margin security features into the company’s printing business.
    ·         An order for the company’s plastic printing business to be a base-stock provider for African drivers’ licenses.
    ·         The announced intention to increase sales efforts in order to raise the company’s national profile in the industry.
     
    If DMC keeps making progress, the share price should rise with or without takeover speculation.


    Disclosure: no position in DMC
    Oct 01 11:17 AM | Link | Comment!
  • Document Securities Systems (AMEX: DMC) Valuable Technologies
     
    DMC participates in the anti-counterfeiting industry.  This industry is benefitting from the relatively recent widespread realization that counterfeiting has become a significant threat to national security and to the health of billions of people.  The industry is highly fragmented, and pundits are calling a major wave of consolidation of both technologies and companies practically inevitable.  There are some large companies with smaller anticounterfeiting segments, which should be well able to afford acquisitions.  For example, 3M and Avery Dennison.
     
    Here’s some background:  Over the last 20 years, with the increased ease of transport and the sophistication of technology, counterfeiting and piracy have exploded.  According to the U.S. Department of Commerce, every link in the U.S. supply chain has been affected.  Counterfeiting costs U.S. businesses $200 to $500 billion per annum, and about 750,000 jobs.  Advanced computers, copiers, and scanners have allowed counterfeiting to permeate virtually all businesses.  Whereas footwear and clothing were the earliest products massively counterfeited, now the problem is extensive in pharmaceuticals and consumer electronics, and has even affected the U. S. military and NASA.  It has become impossible to ignore; the motivation to prevent it is mounting.
     
    Document Securities Systems has valuable technologies.  One of them is used in currencies worldwide.  Its technology also secures US Social Security cards, spare parts for Boeing aircraft and the FAA, Panama Canal visas, coupons for Pfizer, Proctor and Gamble, Quaker, Pepsi and Lorillard, to name a few.  The company has developed or acquired over 30 technologies.  Since there are no foolproof methods of preventing counterfeiting, the most effective practice is to “layer” several technologies, mixing and rotating them.  The older technologies are used along with the new—hence, no risk of obsolescence.
     
    DMC is in an industry that’s going to become hot, and with important technologies.  It has an ongoing R&D effort, and a history of continuous innovation.  If nothing else, this should make it a good target.


    Disclosure: no position in DMC
    Sep 29 4:01 PM | Link | Comment!
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