The Strange Case Of Acitividentity...

S

stonedinvestor

Attention all risk takers ACTI has a mega beautiful chart it's pulled back on light volume and the stonedinvestor want to take a stab at it. In Oct the co released a press release about a large government contract:
... the announcement of a huge HSPD-12 government contract. Specifically, the company announced a major contract win with the U.S. Department of Defense (DoD), U.S. Army and U.S. Air Force for ACTI's smart card desktop client software to enable their move to next- generation HSPD-12 certified Common Access Cards for 3.5 million military personnel and contractors around the world.

Jason Hart, CEO of ActivIdentity, had this say: "The issuance of HSPD-12 enabled smart cards throughout the government is a tremendous first step toward the security and efficiency goals set by the President. We are now working with many agencies to help them begin the process of putting the infrastructure and applications in place to allow the full potential of interoperability and advanced authentication."

Interestingly, the Stanford Group Company values the HSPD-12 market at approximately $1.3 billion over five years, with the bulk of the revenue flowing in fiscal years 2007-2009 (Identity Solutions Industry Outlook, July 2006). So clearly, ACTI has a significant business opportunity as HSPD-12 rolls out.

If ActivIdentity can continue to execute on its revenue growth and cost-cutting initiatives, the company will, as per management´s guidance, turn a profit in 2007. Assuming a $60 million revenue run rate in 2007, and $135 million in cash (no debt), that implies a price target for ACTI of between $6.25 and and $7 per share.

But whoa folks! CHECK THIS OUT (1) ACTI then takes back the press release!: FREMONT, Calif., Nov 02, 2006 /PRNewswire-FirstCall via COMTEX/ -- ActivIdentity Corp. retracts its press release distributed October 24, 2006, entitled "Department of Homeland Security's Transportation Security Administration Chooses ActivIdentity FIPS-201 Smart Card Solution To Increase Airport Security," as it was published without the prior consent of TSA.
The approved Apptis/TSA press release, which includes information on the ActivIdentity products that are part of the Apptis solution, was issued August 29, 2006 can be found at http://www.apptis.com/news.sec/press.sub/apptis_selected_to_redesign.pg .

Alright so I have a little work to do today- dig through the approved release from the Gov and then see if the numbers add up. Another weird thing, ACTI has delayed their earnings release once pushing it to tonight-- normally all of this would have me running for the hills but my " instinct-O'-meter'-Meter " is saying BUY. After a workout and a cleaner thought process, I will
take another look at this but this could be THE PLAY OF THE DAY! ~ stay tuned.
 
Well I don't feel good about this at all but I went in for 1500 at the close. I spent the day eating lobster rolls & french fries instead of researching and I just threw my hat into the fire without any additional work on the name. Will Mr. Market reward me? I don't deserve it if it does..... Pray for the stonedinvestor.
 
I think I dislike Larry Kudlow because it's during his shift the after hour quotes roll by... looks like I'll be down on this one, this is a good lesson for investors starting out.
(1) Always track the stock you want to buy for at least a week or two before buying it so you become familiar with the trading pattern and volume. I did not do that.
(2) Always care about what you are going to buy don't go just buy the chart- or you will be telling your wife in the morning >you won't be going out to dinner tonight because I just had to have some Actividentity!
(3) Don't buy stocks with stupid names.
(4) Don't buy stocks who's symbols you can't remember at lunch! This shows just what a dick you are being with the market & how carried away you are getting with yourself & the investing.
(4) Now in this case we have the usual GLOWING earnings report to deal with. How many freakin' times have I been in this position before? Record this, record that, blah, blah, blah. In biotech it's even worse- you usually hear about how great the product still is, how many lives it will save and how psyched management is for further testing, all the while your stock is spilt in half! So we have a trap situation here. Is the stonedinvestor going to get trapped into holding a stock he doesn't give a rat's ass about....

Read This Earnings Report and see if you can spot the one offending sentence... I found it.

ActivIdentity Announces Record Quarterly and Annual Results for Fiscal Year, Ended September 30, 2006
- PR Newswire

FREMONT, Calif., Dec 05, 2006 /PRNewswire-FirstCall via COMTEX/ -- ActivIdentity Corporation, , a leading provider of digital identity assurance, today reported its financial results for the fourth quarter and fiscal year ended September 30, 2006.

Revenue for the fourth quarter of 2006 was $17.9 million, compared with $9.4 million for the fourth quarter of 2005 and $12.9 million for the previous quarter ended June 30, 2006. Net loss for the fourth quarter of 2006 was $0.3 million, or $0.01 per basic and diluted share, compared with a net loss of $10.1 million, or $0.23 per basic and diluted share, for the same period in 2005. The Company's net loss for the third quarter of 2006 was $5.3 million or $0.12 per basic and diluted share.

Gross margin for the fourth quarter ended September 30, 2006 was 72 percent compared to 58 percent for the quarter ended September 30, 2005, and 55 percent for the quarter ended June 30, 2006.

Total operating expenses for the quarter ended September 30, 2006 were $14.6 million compared to $16.6 million for the quarter ended September 30, 2005 and $14.4 million for the previous quarter ended June 30, 2006.

Cash used in operations for the quarter ending September 30, 2006 was $3.6 million compared to $3.0 million for the same quarter in 2005 and $1.2 million for the previous quarter ended June 30, 2006.

"The fourth quarter ended a year of revenue growth and improved operational efficiencies for ActivIdentity. I am delighted by the support of our staff and executives who have worked together to implement changes, focus our business and deliver on our plan for 2006," said ActivIdentity Chief Executive Jason Hart.

"In fiscal 2007 we plan to grow our top line revenue by focusing on our market strength and experience in providing employer to employee smart ID solutions and government to citizen ID solutions, while building our business together with our key partners. In addition we plan to continue to concentrate on simplification to increase our operational efficiencies," Hart continued.

"We are encouraged by the positive trends in the business and expect these trends to continue into our next fiscal year. Although we expect the business will continue to be subject to seasonal variations, we believe it will generally grow inline or better than our market sector," Hart added.

Financial Highlights:

- Revenue: ActivIdentity's 90 percent quarterly year-over-year revenue growth in the fourth quarter of fiscal 2006 was the result of several factors, especially growth in the government sector. Additionally, the Company increased deferred revenue by $5.2 million during the fourth quarter of 2006. For the fiscal year 2006, ActivIdentity generated revenue of $53.4 million, an increase of 27 percent from $42.2 million for the year ended September 30, 2005.

- Net loss: ActivIdentity's net loss per basic and diluted share of $0.01 for the fourth quarter of 2006 concluded a year of steady earnings improvement. For the fiscal year 2006, the Company posted losses of $22.5 million, or $0.50 per basic and diluted share, compared with a net loss of $47.9 million, or $1.11 per basic and diluted share, for the fiscal year 2005.

- Cash Position: Cash (including short term investments) at the end of fiscal year 2006 was $128.0 million.

Operational Highlights:

- Customer Base: ActivIdentity closed 14 significant wins to new and existing customers in the quarter. The Company sold its smart employee ID and citizen access card solutions to a broad base of customers across multiple vertical markets in the fourth quarter of 2006; in particular, sales to the government sector grew.

- Key Partnerships: ActivIdentity continued to leverage its strategic relationships during the fourth quarter, delivering on new major projects in the U.S. and Europe with EDS, Novell and Unisys.

First Quarter Business Outlook

The company expects first quarter 2007 revenue to be in the range of $13.5 million to $15.0 million with a loss of between $0.08 and $0.11 per basic and diluted share. Cash (including short term investments) are expected to increase to between $128 million and $130 million.
 
Would the offending sentence be: "We are encouraged by the positive trends in the business and expect these trends to continue into our next fiscal year" ?

Or perhaps the statement about deferring revenues till the next tax year?

If I knew nothing else of the stock (and I don't) I would say this sounds wishy-washy to me and like a company in a defensive posture attempting to hold revenues up and shrinking costs at the expense of future revenue growth.

You shorted the stock, wrote naked calls or bought cheap puts right? :D

TS
 
You nailed it TrendSailor.. especially the last part:
"We are encouraged by the positive trends in the business and expect these trends to continue into our next fiscal year. Although we expect the business will continue to be subject to seasonal variations, we believe it will generally grow inline or better than our market sector,"

Wishy washy isn't the word! They pulled out the old
"seasonal variations " line which is code for lumpy earnings ahead- maybe missing a contract to be rolled into the next qtr. And even worse said they might grow inline with the sector.. or better. And I might get sick from a poison hamburger.. or I might not it. Which is it? Either way I have a feeling I'm going to wake up in the puke tomorrow!
 
Wow you know you're hot when even the crap you buy spikes. Would you believe this was up like 50 cents this morning? And what did I do? I watched it all be given back. It's called greed folks. ~ stoney
 
Well folks I would never talk up my book I bring you my ideas before I get into them and I don't think anything any of you can do can help my easily 1500 shares of Actividentity HOWEVER if you are a contrarian you look at this Companies earnings report:
ActivIdentity Corp. (ACTI) said the fourth-quarter net loss narrowed, as revenue rose, to $343,000, or a penny a share, from a net loss of $10.1 million, or 23 cents a share, during the same period in the prior year. Analysts had expected a per-share loss of 9 cents.
And you say what's wrong with this picture the street expected a loss of 9 cents and they came in at plus 1!
Bet you this fixes itself in a big way unless something came out in a management discussion today I'll be looking into it. ~stoney
 
You must log in or register to reply here.
Back
Top