Vasco Data Security holds the key to electronic banking


The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Vasco Data Security. (Note: Vasco is only for investors who can tolerate high-risk.)

Vasco Data Security International, Inc. (Nasdaq: VDSI) designs, develops, markets, and supports patented user authentication products.

Analysts like Vasco's security tokens, handheld devices, and related software used for authenticating a person's identity to computer networks. VACMAN Controller serves the banking and e-commerce markets, while VACMAN Middleware provides user authentication to existing Radius based environments.

Analysts see continued strong growth for VDSI's products as online e-commerce continues to increase at double-digit rates. Margins remain adequate to good; costs are reasonable. The Reuters FY 2007/FY 2008 EPS consensus estimates for VDSI are $0.67 to $0.89.

Further, the market's recent pullback has taken some the speculative excesses out of VDSI's shares, with shares now reflecting an improved p/e, although keep in mind VDSI remains a high-risk stock.

The First Call mean rating for VDSI is: Buy [13 firms]. Mean 2008 target: $35.00 [high: $45, low: $26].

The risks? Analysts have an eye on corporate tech spending for signs of a slowdown. Analysts are also watching VDSI's core component costs.

Stock Analysis: Vasco Data Security is a high-risk stock not suitable for moderate-risk and low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from VSDI's shares. Sell/Stop Loss if you were to purchase shares in this company: $9

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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Last updated: February 13, 2012: 10:04 AM

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