3SOF

Security Stocks: Secure Picks for Growth?
Homeland security has been a front-burner issue for six and a half years now.  It's been a bonanza for companies involved in protecting Americans from terror and crime, and Brian Ruttenbur indicates there's still a lot of upside.

"We have four companies out there that are growing at 30+ percent internal growth," the Morgan Keegan homeland security analyst told CNBC.  "Just about everyone is growing double digits."

Recommendations:

Ruttenbur's first pick among homeland security companies is AuthenTec, a maker of fingerptint-authentication sensors

"They're growing roughly 45-50 percent a year, and they're going on laptops and cell phones," he said.  "You'll see the first cell phones [with fingerprint sensors] in the U.S. this year."

Update:

Interesting chart layout...
AUTH has been consolidating the recent gains, trading in a small range between $12.80 and $14 (with some spikes). It has been also reacting positively on its ascending support line, and tested the $14 resistance last session.

The fundamental case looks strong, and we'll probably watch a breakout soon, that would probably extend this up swing a few bucks into the upside.
Apart from some bullish comments (thanks la-onda ) no new coverage has been published recently.
Let's wait for positive developments.

Trading Plan:
HOLD AUTH

Update:

Cowen & Cº published a new note with some comments and estimates after a recent company's presentation:



AUTH is still trading below the $14 resistance level, but also reacting positively on its ascending support. This kind of technical layout suggests an upcoming upside breakout, we'll wait for developments at this point.

Trading Plan:
HOLD AUTH

It looks like AUTH is consolidating inside the nice triangular pattern. Do you plan to place a stop in case this pattern is broken down? I believe in a case of a technical breakdown, the downfall may be rather steep in this case - the pattern looks like an abyss to the right... unless AUTH grows wings. 

Quote from: berloga on June 09, 2008, 11:21:20 AM
It looks like AUTH is consolidating inside the nice triangular pattern. Do you plan to place a stop in case this pattern is broken down? I believe in a case of a technical breakdown, the downfall may be rather steep in this case - the pattern looks like an abyss to the right... unless AUTH grows wings. 

Hi Berloga,

Yes, this pattern looks quite bullish till now, and this kind of resistance usually suggests an upcoming breakout to the upside... but of course a breakdown would be negative from a technical point of view and may set a down swing for a while.
We're introducing a stop level at this point.

Update:

AUTH is holding quite well this upper range; this is bullish especially when taking in consideration the broad market behavior during the last sessions. But if AUTH fails to breakout this $14 resistance soon it will most likely need a correction to the downside.

We're introducing a stop level slightly below the current upper range and below the ascending support line, so the new trading plan is:

Trading Plan:
HOLD AUTH with a stop @ $12.85

AUTH stopped @ $12.85

I was feeling that AUTH would fall like a rock if it broke down from the triangular pattern. Good thing I stopped out as well. Man, market has been crazy!

The last couple of weeks I thought the overall market would go down and  I thought this might go down to fill the gap in the mid 10's so I have had a limit order in to buy at 10.65.  I barely missed it yesterday and it is up 1.60 today.  Oh well I did hit a couple of other OB's yesterday.  I do like this company though and will keep an eye on it.

poli

 
AuthenTec shares rally on upgrade by Raymond James
Thursday , June 12, 2008 12:04ET

SAN FRANCISCO, Jun 13, 2008 (Thomson Financial via COMTEX) -- Shares of AuthenTec Inc. rallied Thursday after Raymond James upgraded the developer of fingerprint authentication sensors to strong buy form outperform with a $17 price target.

"Fingerprint sensors are proliferating on multiple devices, particularly notebooks and handsets," analyst J. Steven Smigie wrote in a note to clients. "We believe that AuthenTec is the market share leader in these markets, with ~55%+ share in notebooks and ~90%+ share in handsets. These markets are at early stages of penetration."

Smigie said notebook and handset markets alone offer solid growth opportunities over the next 3-plus years, and that there are many other devices that can use fingerprint sensors.

He noted that as of yesterday, AuthenTec's shares were trading below its IPO price, despite the fact that the company has beaten estimates in all three quarters since going public.