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Document Securities Systems (AMEX: DMC) Valuable Technologies

|Includes: Document Security Systems, Inc (DSS)
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