VASCO Data Security International, Inc. (VDSI)

Ganndalf (< 20) Submitted: 10/26/07 7:12 PM : Start Price: $27.20 VDSI Score: -39.37

Vasco just got slapped down 30% of its market cap, and the momentum investors shriek in horror as Halloween appraches!

I say: GOOD! EVEN BETTER!!

I bought a modest amount of shares today seeing it as a good fire sale.

Vasco has some very good fundamentals in my opinion. And their valuation seems pretty fair right now.

Whether or not they will come back quickly or very slowly is speculation, but I think the stock price certainly will come back up sooner rather than later.

Vasco is the sort of stock that I would usually pick up when I screen for small-caps. They have very high inside ownership. Their 3 year revenue and earnings growth are very attractive: 30, 55, 76 and 3.3, 7.7, and 12.6 respectively.

Past performance does not predict future success, but it can be an indicator of it. I don't see this company slowing down much any more than Secure Computing.

Look at their cash flow from operating activities the last 3 years: 2.9, 7.5, and 12.6. That is excellent.

Vasco has a TTM profit margin of 20%. I'm not going to diss that. They have a daily dollar volume of $35 million, which is a bit higher than I'd like to see for a small cap, but it'll surely do. This company still is pretty much under the radar of the big players on Wallstreet. I don't think the Fool has even given them a feature article yet.

Tom Gardner has had nice things to say about Vasco. And if you look in Caps, TMFMileHigh, TMFPlatoish, and the Garcipian have some nice things to say about Vasco.

So, yeah, I do like the instant 30% drop, but there's much more to like about Vasco than that.

That's my quick take of some of the pros for this investment.

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