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Secured Data, Inc. (NASDAQ OTC:BB: SCDD) is a technology
company that is dedicated towards introducing its software and
hardware ASP products and solutions to the overburdened judicial
and law enforcement communities in the United States.
The Company acquired its core technologies from iCyber-Data,
Inc. in February of 2002, including the Court Manager
SuiteSM, an ASP software package and service designed to
seamlessly integrate data and information from various federal,
state, and local judiciaries and agencies into a single, easy-to-use
Internet and Intranet interface, and IDNet, an ASP
solution that provides law enforcement personnel in mobile locations
with access to criminal justice databases and command-and-control
features via wireless PDA devices. The nature of the this
one-stop, remote demonstration package also aptly lends itself
to detailed customization, and interconnectivity with clients
who's budgetary constraints may limit their ability to fully
network with other agencies.
REASONS TO BUY
-Increasing security concerns create an opportunity for SCDD
to expand product offering.
-SCDD's Court Management Suite beta testing has demonstrated
increased courtroom and case management efficiency, and reduced
court and administration costs by almost 50%.
-The government IT marketplace is tremendous and growing
at a CAGR of 8.6% from 2001's figure of $82 billion in
revenues to an estimated $114 billion by 2005.
-The market for judicial management IT software and
services alone exceeds $1 billion annually.
-Ready for sales - SCDD spent 2 years in research and
development and $2M to develop their proprietary Court Management
Suite software.
-SCDD recently completed a successful beta-testing
phase in 22 judicial locations, and the Company has already
entered into a service contract with Hillsborough County,
Florida.
-SCDD expects to have sales exceeding $9M and achieve
positive EBITDA in 2002. The Company also expects sales
to reach $71M in 2003 with an EBITDA of
$21.5M or $1.62 per share. |
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COMPANY: |
Secured Data Inc. |
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SYMBOL: |
SCDD |
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SHARES OUTST: |
13.2M |
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APPROX. FLOAT: |
2.0M |
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MARKET CAP: |
$2.6M |
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CURRENT PRICE: |
$0.05 X $0.06 |
-SCDD has initiated discussions with industry leaders
in the networking field to market the Court Manager System
and IDNet applications, penetrating other vertical markets
such as military operations, hospital systems and commercial
conglomerates.
SCDD'S VALUATION
In our opinion, there are 2 ways to value SCDD, one
a multiple of earnings, and two a multiple of revenues. According
to Multex, SCDD’s peer group trades in the marketplace
at 21.82 times earnings. Based on the company's projections of
$0.30 per share in earnings for the 2003 fiscal year, this
would equate to a stock price of $35.34 per share. If we
take the conservative view that the company only does 20% of
what it says it will do we are looking at a target price of approximately
$7.09 per share in twelve months (based on 2003 EBITDA).
If we look to value SCDD on a multiple of revenues,
then we should look no further than Alladin Knowledge Systems
(NASDAQ:ALDN). Unlike Alladin, SCDD is expected
to be profitable in their current fiscal year, the primary
difference for the most part is, Wall Street has not heard of
SCDD. If SCDD were to trade today in the marketplace,
at the same multiple of revenues as ALDN (which is 0.5
times), then based on the company's forecasts of $71.3 Million
in revenues for the 2003 fiscal year, this would equate to a
stock price of $2.67 per share.
CONCLUSION
Continued concerns in the administration of the judicial system
creates a potentially positive outlook in SCDD’s
revenue and earnings growth, we believe that SCDD is
an undiscovered (until now!) and undervalued investment opportunity
for risk oriented investors. As Wall Street uncovers SCDD's
story, we believe this could have positive effects to SCDD’s
share price.
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