L-1 Identity Solutions, Inc. (ID)

surprise earings

With the downturn in the economy, and more people desperate, there is a significant need to for security.

They screwed up Vermont's IDs, but that doesn't mean other states won't start using their enhanced ID services.

I've heard there is a GAO investigation into the State Department's handling of the acquisition regarding the passport card which holds a lot of revenue for L-1.

Very well positioned in digital documentaion and access control growth industry.

Backlog of $1.1 billion covering 84 percent of revenue for 2009. most companies would love to replicate.

2008 free cash flow $47.5 million. Adjusted EBITDA and free cash flow covers operating expenses, fixed debt service, and capital expenditures while providing excess cash to pay down debt.

The $528.6 million non-cash charge they took for goodwill, intangibles and other long-lived assets removes albatross around the neck of future financial reporting.

Government spending does not appear to be slowing

Prestigious and well connected people on the board will help L-1 win contracts. .

Intrinsic value of $20.

Inside track on inevitable biometrics identification contracts with US gov't due to former gov't officials on the board and in management including former director of the CIA. Also many insiders from large defense contractors plus the added bonus of several insiders being from former small companies that were eventually acquired by large defense contractors.

3-4 transition stock in an interesting field.

Valuation is way too high for what they are making and what they will make. This is well overdue for a correction.

The entire security industry is going through a multi year boom cycle. It is way undervalued at this price. Barriers to entry for new competitors are very high. Once th P/E get a little bit bettter will be a potential takeover target

Well I have this one in my portfolio because I used to own Bioscrypt and of course ID bought Bioscrypt. I think that this company has a future of up side but like alot of things that I seem to pick the upside happens way to long in the future for any benefit to acutally be realized by me. I am just holding onto to this for now to see where it goes.

Acquired ID Systems Business from Digimarc Corporation

L-1 is poised to be the premier manufacturer of identity solutions for protection and security within the US and Europe. Their product line is the most advanced and should lead to substantial profit increases once all subsidiaries have had their synergies optimized. L-1 would also be a prime take over candidate once the market uncertainties of the financial crisis have subsided.

expanded way too rapidly

Time to buy ID. Insiders have. Trading at are below book, just when the contracts are rolling in.

Target $30

Good forecast, upcoming government contracts, all in one solution gives them a competitive edge.

big brother will track our every move