Been turning this one up in my stock screener lists over the last week or so on differing criteria. Anyway took the plunge this morning and added more after seeing this item from GCI, its derd cheap and should be on at least double that P/E. Well worth a read and please DYOR................

OpSec - STRONG BUY
Companies: OSG
07/11/2006

Growth Company Investor recommendation OpSec the anti-counterfeiting counter backed at 42.5p earlier this year when known as Applied Optical Technologies merits closer investor inspection ahead of forthcoming half time figures to September.

Last year proved a watershed, with the company moving into the black with a 1.7m full year profit scored on 25.4m sales, under the stewardship of chief executive Mark Turnage.

And quite simply, the company continues to go great guns. A recent pre-close update, ahead of the interims, boasted that figures for the year to March would be significantly ahead of forecasts. The European operations have performed strongly, and the interims will show dramatic improvement year-on-year. And though the American operations experienced a slow first quarter, business picked up markedly in the second quarter.

Turnage is clearly delighted with June acquisition GenuOne, bought for 7m in cash, which provides anti-counterfeiting software that allows brand owners to monitor and protect their products and brands across auction sites like eBay. Fundamentally important to the brand protection business, the acquisition has created a unique company able to meet the needs of global brand owners in both the online and supply chain environments.

3dcd, the groups 50-50 joint venture with Technicolor, also had a remarkable first half, with Microsofts imminent software launch having buoyed business. For March 2007, upgraded forecasts suggest pre-tax profits of 3.8m from approaching 31m sales, and earnings of 5.2p, placing the shares on a forward price-to-earnings multiple of 12.1. That is way too low for a cash-rich growth company with global brands on its client list. Buy.

James Crux
Market cap: 33.6m
PE Forecast: 12.1

Prospective PE for year ending March 2007 is 14.6 at SP 74p (assumed EPS 5.2p).

Plans for the future look good as well.

Good solid results then ST.

Sp should have some momentum behind it with the bolt on coming up.

Yep; it looks as if the acquisition is adding a good amount of business. I just hope that the company's plan for future acquisitions does not overstretch the balance sheet.

Mentioned in today's FT:

Fighting the fakes

Christmas spending on the internet is expected to show terrific growth this year. Every reason then for brand owners to become increasingly protective of their most valuable asset.

Their anxiety is being targeted by OpSec, the anti-counterfeiting company that in June acquired GenuOne. The acquisition trawls the internet looking for dodgy goods. It has links to Ebay, which will close down any auction of goods shown up as illegal copies.

Recently the company approached Ducati, the Italian motorcycle maker with some nice fashions attached, and asked whether it was losing sales to internet pirates.

Ducati thought not, but agreed to a trial of the GenuOne software. Within 10 minutes, a site was discovered in Pakistan, complete with name and contact details, offering to produce a maximum of 3,000 Ducati leather jackets a month at a knockdown price of $60 a unit. The minimum order of five had a delivery time of three days.

OpSec, which used to be known as Applied Optical Technologies, this week reported more profits in the first half than it has ever made previously in 12 months. Perhaps, after years of struggle, its time has come.

Also in the FT (ft.com), yesterday:

OpSec Security - until recently known as Applied Optical Technologies - made more profit in the first half than it had ever made before.

"We have had a great half and we are going into the second half with record trading," said Mike Angus, finance director of the anti-counterfeiting company. "The order books are full, and we are chasing very significant business."


Turnover rose from 13m to 14.4m in the six months to September 30. Pre-tax profits rose from 930,000 to 2.76m - well above the record 1.7m for the year to March.

The latest profits were driven by a 2.2m contribution from its joint venture with Thomson of France, which has supplied hologram technology to protect "a major new software programme" for its principal customer - understood to be MicroSoft. The company does not expect such a contribution in the second half.

The loss of a US contract in 2005 was behind a 6 per cent fall in revenues at the banknote and high security documents division - but Mr Angus said the lost contract had been replaced with new business.

Earnings per share rose from 1.2p to 4.3p. Full-year profits are expected to be 3.8m.

The shares closed at their highest level since 2001, up 2p at 72p.

ST, worth having a look at the companys site for investor presentation given on last couple of days.

Another move up today.

nice tick-up today: OSG Bid: 75p Offer: 78p Change: 2.5

40K shares traded. Takes me into profit, too.

Up again today: OSG Bid: 76p Offer: 79p Change: 1

If it does this every day for a year, I'll be a very happy Soul.

I've consistently failed to get into this one. ;-((

Well, I only bought at 72 and a bit, having been persuaded by the figures and the prospects. Peter Lynch: "Selection is more important than timing." Okay, it doesn't always hold true, but if this co is scheduled for more growth then it's not too late to get on board.

st - I try to get in to the right thing at the right time. Think Lynch is wrong.

Understood - but I think his point is that quality will out, and since he is one of the "long-term greedy", a la Buffett, his statement makes sense.

The quote I really like, however, is by some American who confounded the pros by making about $15,000 into millions, who said, "I don't buy stocks when they're cheap, and sell when they're expensive. I buy when they're dirt cheap and sell when they're cheap."

I am trying to follow his lead. Wish I knew who it was so I could see if he's published anything.

It is turning out to be a rather unexpectedly nice day today:

OSG Bid: 78p Offer: 81p Change: 3

Keep trying Big Al, it might be the companys software that is detecting you, LOL.

LOL!

Selection is indeed important, but timing the buy/sell on the chart, etc can make a very big difference to your performance.

Agreed.

I also nearly bought a few weeks ago , dam !!!!!

Still cheapish.

Will watch for any pullback I think and might chuck a couple in the SIPP, otherwise I'll class it in the "ones that got away" category.

There have been a few over the years. ;-0