COGT

[KCScott]

Cogent, Inc - provides automated fingerprint identification systems (AFIS) and other fingerprint biometrics solutions to governments, law enforcement agencies, and other organizations worldwide. It offers two primary AFIS solutions, Cogent Automated Fingerprint Identification System (CAFIS) and Cogent Live-ID. CAFIS is a networked AFIS solution for local, regional, and national systems. Cogent Live-ID enables customers to identify individuals who submit their fingerprints for border crossings, background checks, fraud prevention, criminal investigation, document identification, voting stations, and other activities where security is a concern. The company also offers proprietary application specific integrated circuit technology (ASIC) that is delivered as part of its Identification Module, an image processing and biometric matching unit designed for applications requiring biometric identification and authentication. Cogent markets its AFIS solutions directly to end-users and indirectly through prime contractors, as well as its proprietary ASIC device indirectly through original equipment manufacturers, resellers, and distributors. The company has strategic relationships with IBM, Hewlett-Packard, Fujitsu, and Sun Microsystems. The company was founded by Ming Hsieh in 1990. It was formerly known as Cogent Systems, Inc. and changed its name to Cogent, Inc. in 2004. Cogent is headquartered in South Pasadena, California

I'm a security and loss prevention consultant and have followed Biometrics and their applications since my first exposure 5 years ago. several associates in my field referenced Cogent in relation to a private company called "Pay By Touch" used by one of customers.

The DD on this company showed a Best of Breed software company with a large amount of cash, excellent margins and seemingly limitless potential.

I've been in this stock since early June at $22.06 per share and have watched a remarkable run up.

With record Q2 earnings behind them, today was another 5% run to close at $33

All signs continue to point towards continued growth, though I'm wondering how high the Target should be set with a 3.0B market cap for a 130M in revenues?

[KCScott]

I work with large national retail chains. I discovered Biometrics by way of an FMI LP conference I attended in San Francisco. At most of these shows you see the same LP products, just in different form. The biggest buzz created at this show was  "Pay By Touch"

The idea was pretty simple - register your customers by fingerprint: eliminate the need to request ID, eliminate pin #, eliminate the possibility of stolen or counterfeit checks or identity theft. The buzz on this was huge, but PBT is a privately held company. This year two of my large supermarket customers initiated tests with PBT.

I also started to think about all the applications for this type of technology. From Homeland security / passports / drivers licenses to ATM's to credit cards, to eliminating the key for your car or a password to log onto your computer, Biometrics looked to be a technology that has unlimited potential well beyond law enforcement.

After some investigation I discovered Cogent provided the AFIS software to PBT.
As I dug deeper into COGT I found a very tightly run company, flush with cash that was doubling in size over the previous year. I spoke with several of my contemporaries as well as friends in federal law all of whom indicated the AFIS provided by Cogent was superior to any other technology they had tested. 

At the core of this are the algorithms used by Cogent. They are able to identify a match in a database faster more accurately than any other AFIS provider.

Since I bought in late June at $23 I've watched them move up to $33 and pull back now to $27.56 - This is not a trading stock for me, it is a core holding - pending any future change in fundamentals or management.

Some interesting Links:

Cogent Website
http://www.cogentsystems.com/

Key statistics - Note Revenue Growth, Forward PE, Ownership (% held by insiders), Total Cash & Total Debt (0)
http://finance.yahoo.com/q/ks?s=COGT

Headlines: The Contracts signed for Morocco & Hati in June will not begin to generate revnue till Late Q4 (About 6 Months lead ) so all revenue recognized YTD ( 134% increase vs. 2004 YTD has been generated from existing streams)
http://finance.yahoo.com/q/h?s=COGT

Front Page of Yahoo News Today:
http://www.forbes.com/technology/2005/08/08/0808digilifeslide.html?partner=yahoo

Pay By Touch website:
http://www.paybytouch.com/



EliteG has been so kind as to offer a TA

[eliteG]

Here's some TA KCScott.  What I make out of it is:

Currently: -we have a downtrend meeting strong support
   strong support:
             }50sma
             }200sma
             }fib 38.2 and 50% retrace
             }previous Support/Resistance acting as support

So to get in this one.. I would wait for the downtrend to crack and then wait for the next consolidation to break on strong volume/price action.  Stocks usually move in trend, range, trend.  Usually.. so yea she may run after breaking the downtrend but most often a stock needs to setup a new consolidation.

charts - 

[rocket8]

i think COGT is fully valued fundamentally.

it is trading at a forward PE of 42.

the financials on the company are fantastic and this is just the early days of biometrics.

i believe biometrics are going to go big.  pretty obvious i think.

i think it really is a great long term pick.

its a $2.5 billion dollar company today.  i can see it doubling.  sales have been doubling every quarter from the year before.

its just the damn forward PE is high at the moment.

i don't know if i would go so far as to call it the microsoft of biometrics because microsoft has a monopoly and COGT wont have a monopoly platform.  as i understand it they already have to fight competition to win each installation.

[KCScott]

COGT is starting it's run towards the next earnings.

The 30 Day View:



I'm not a TA guy, but the One Year View it looks like a cup and Handle formation:



The right rim of the cup was $33 was on Aug 2.

Knowing this stock as I do, there will be progressive increase through the September earnings. Management is very tight lipped about orders and forward guidance - Under promise and over deliver seems to be the management style.

The balance sheet is fantastic w/ No debt:

http://finance.yahoo.com/q/ks?s=COGT

With 66% of this company still owned by insiders.

[KCScott]

COGT is starting it's run towards the next earnings.

The 30 Day View:



I'm not a TA guy, but the One Year View it looks like a cup and Handle formation:



The right rim of the cup was $33 was on Aug 2.

Knowing this stock as I do, there will be progressive increase through the September earnings. Management is very tight lipped about orders and forward guidance - Under promise and over deliver seems to be the management style.

The balance sheet is fantastic w/ No debt:

http://finance.yahoo.com/q/ks?s=COGT

With 66% of this company still owned by insiders.

[ScottishTrader]

Just saw this, and I do agree that biometrics will be a major emerging technology in the coming years.  Just take the tests going on in some major international airports of biometrics to fast-track business check-in as one example of a technology that will become much more pervasive.

Looking at the recent posts and the current chart situation, it has to hbe said that Cogent did not hold previous support and pulled back further.  I am not 100% confident that it is done with its decline, but  it does seem to be showing some signs that it could initiate a pullback soon.

Having a look at the chart, it has been following a descending channel for the past 2 months.  However, I don't think that this is the handle of a cup, as in the long term chart, the "cup" is not well formed and does not have a smooth bottom curve.  I might be wrong though   

Anyway, it recently dropped through both the 50% and 38.2% Fibonacci retracement lines (in 2 days!), which is not a great sign, but hopefully it may find some support at the current level, 22.75, which looks like a long term support/resistance level.  Additionally, the RSI has just touched 30, indicating that it may be oversold, and if you look back, last time it touched this level signalled a major advance from the long term low of 19.54 all the way up to 33.10.  I should also note however, that the MACD shows a negative slope at present, which is not a positive sign, although the MACD is extremely negative right now, and some consolidation here may result in a positive divergence of the MACD (good sign!)

If this level does hold, and the indicators look good, I would look for a short-term jump to the next resistance, at around 25.50.  It is hard to say, but if it pushes through this level, then I expect we have a significant advance on our hands, and could be looking to test previous highs at 33.10.

I certainly hope so for your sake, and will be keeping an eye out on this one too.  Any further TA/comments would be very welcome, especially as I am fairly new to TA and very keen to get feed back on my analysis.

Good trading KCScott 

[KCScott]

Thanks Scottish Trader.

Based on the intraday, something is going on (up $1.57 = 6.61%)- I guess it to be a forthcoming contract announcement - or possibly institutional buying (the secondary offering was gobbled up at $ 25.50) - In either case I continue to hold this for the long term.

Also, this stock is primed for an extreme short squeeze (13.4% short as of 9-12) - if your inclined to play the short term

[KCScott]

Based on the intraday, something is going on (up $1.57 = 6.61%)- I guess it to be a forthcoming contract announcement - or possibly institutional buying (the secondary offering was gobbled up at $ 25.50) - In either case I continue to hold this for the long term.

Also, this stock is primed for an extreme short squeeze (13.4% short as of 9-12) - if your inclined to play the short term

[ScottishTrader]

KCScott,

You confused me there - how come you have 2 threads on Cogent going on??  I know it happens sometimes, and perhaps they are where they are for different reasons, but do you think we could get them combined?  Might be easier than looking for updates on both.

Just my thoughts

[KCScott]

KCScott,

You confused me there - how come you have 2 threads on Cogent going on??  I know it happens sometimes, and perhaps they are where they are for different reasons, but do you think we could get them combined?  Might be easier than looking for updates on both.

Just my thoughts

How do I combine them?

[ScottishTrader]

Ask David or Frederick to

[Ramsburg]

Ask David or Frederick to

done

[KCScott]

News Today - Up 8% and short interest being squeezed:

Cogent Systems Awarded Contract to Install Canadian National AFIS
Friday October 14, 12:47 pm ET 
Initial Order Estimated at Approximately $10 Million


SOUTH PASADENA, Calif.--(BUSINESS WIRE)--Oct. 14, 2005--Cogent Systems (Nasdaq:COGT - News) announced today it has been awarded a contract as the prime contractor for its new integrated Automated Fingerprint Identification System (AFIS) for the Royal Canadian Mounted Police (RCMP). The initial order is estimated at approximately $10 million, not including options. The AFIS will be used by the RCMP as part of its Real Time Identification (RTID) initiative which will meet the growing demands for post 9/11 identification services for criminal, civil, immigration and international needs. The contract provides for options to support additional integration over the next four years. IBM Canada is Cogent's partner for this project.
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The contract includes software and hardware, as well as engineering services and maintenance. Cogent's new AFIS, which replaces a legacy system, will allow fingerprints to be electronically recorded, transmitted and verified against broader databases in a fast and accurate manner. The system also includes a seamless, paperless electronic workflow based on international standards and is designed to scale to support a national database in the millions of records. It will be installed and operational in 2006.

"Law enforcement and civil agencies rely on the accuracy and timeliness of these systems to support the safety and security of Canadians," said Deputy Commissioner Peter D. Martin, who is the RTID Project Sponsor. "The AFIS contract award is a significant step in the RCMP efforts to modernize these essential systems."

"We are pleased to have received this new contract award for the RCMP's RTID project," commented Ming Hsieh, President and CEO of Cogent Systems. "The bidding process for this contract included extensive in-depth independent testing of all potential vendors' matching technology. The strength of Cogent's fast, accurate and reliable AFIS technology during the testing process was a key factor in winning the contract award. Another factor is our ability to provide full electronic interoperability with existing AFIS systems throughout Canada with the new Cogent AFIS. We look forward to working with the RCMP to develop a world class system."

About Cogent Systems

Cogent is a leading provider of Automated Fingerprint Identification Systems, or AFIS, and other fingerprint biometric solutions to governments, law enforcement agencies and other organizations worldwide. Cogent's AFIS solutions enable customers to capture fingerprint images electronically, encode fingerprints into searchable files and accurately compare a set of fingerprints to a database containing potentially millions of fingerprints in seconds.

[KCScott]

Up 9% today on an upgrade from Morgan Stanley

Also strong indication of another contract annoucement