With novel coronavirus cases and particularly deaths remaining elevated, it’s hard to think of portfolio moves that don’t directly relate to the pandemic. However, it’s also important to realize that at some point, we will get past this catastrophe. Further, the best gains are made by looking ahead, not necessarily at the present reality. For the adventurous soul, you may want to consider biometric stocks for your portfolio.
First, the numbers don’t lie. According to a survey by The Insight Partners, prior to the Covid-19 disruption, global biometric technologies revenue was projected to hit nearly $19.1 billion. By 2027, the estimate is $55.42 billion. Just the identity verification component of the market is projected to reach $18.1 billion in that year, providing a strong base for biometric stocks.
Second, the coronavirus pandemic has actually made certain biometric stocks incredibly relevant in the here and now. As I’ll explain in one of the companies below, the national transition of workers telecommuting has opened fresh security vulnerabilities. It has never been more critical to accurately verify one’s identity, a problem that biometrics technology can potentially address.
Third, nobody wants to touch anything while the coronavirus is still rippling throughout the country and the rest of the world. Even when we return to normal, I don’t think we’ll go back to 100% normal right away. A transition to the way things were will take baby steps, and biometrics can help ease some of the pain points in terms of ID verification and even behavioral analysis (i.e., non-compliance with mitigation protocols).
In addition, this mass telecommuting experiment may not be a permanent fixture, at least for some businesses. Therefore, when we return to a somewhat normal place, access management to sensitive facilities will be critical. That plays into the narrative for many of these biometric stocks.
- Ambarella (NASDAQ:AMBA)
- Microsoft (NASDAQ:MSFT)
- Amazon (NASDAQ:AMZN)
- Aware (NASDAQ:AWRE)
- Nuance (NASDAQ:NUAN)
- OneSpan (NASDAQ:OSPN)
- Precise Biometrics (OTCMKTS:PRBCF)
- Ipsidy (OTCMKTS:IDTY)
On this list, I’ve provided a healthy mix of stable and moderate-risk investments. As well, I’ve saved some very speculative ideas for last. However, please exercise caution as we’re living in unusual circumstances and you just don’t know how things will play out exactly. With that caveat out of the way, let’s dive into these eight biometric stocks.
Biometric Stocks to Consider: Ambarella (AMBA)
A semiconductor firm which specializes in image processing and computer vision processors, Ambarella represents an all-around solid long-term idea for investors bullish on next-generation technologies. Presently, AMBA stock has gained tremendous enthusiasm for its underlying innovations in smart automotive technologies, such as surround view systems and parking assistance features. With so much attention directed toward electric vehicles and autonomous driving, Ambarella is well poised to carry its pertinence over the next several decades.
Better yet, AMBA is also one of the top biometric stocks available. Thanks to Ambarella’s high-resolution 3D imaging sensor technology, it’s now possible for corporations and government institutions to restrict access to authorized personnel and individuals. Naturally, this tech has broad implications, both for commercial endeavors and for infrastructure tied to national security concerns.
As well, biometric scanning is much more hygienic than touching potentially contaminated surfaces. At some point, we’re going to get back to normal. However, when we do, we probably will not soon forget the lessons of this pandemic. In other words, the history of the 1918 pandemic might repeat itself. Cynical, yes, but something to consider as a long-term play for AMBA stock.
When you think about Microsoft, typically what comes to mind is its business suite of applications, such as Word or Excel. Or you might be thinking about the company’s Xbox video game console business. Both are compelling reasons to consider MSFT stock.
Obviously, the novel coronavirus pandemic has forced people indoors for several weeks, if not months in some jurisdictions. With entertainment options limited, video game sales have soared. Likewise, with worker bees forced out of the office, Microsoft’s Software as a Solution programs have been lifesavers.
However, another reason to consider MSFT into your portfolio is its relevance among biometric stocks. True, Microsoft isn’t necessarily a biometric powerhouse. However, through its Windows 10 Pro operating system and the Microsoft 365 cloud platform, the company is bringing forward a password-less future through access governed by digital fingerprint or facial scanning.
Well before the pandemic, biometrics as an access point was relevant due to cyberbreach concerns. But with the present crisis, the issue has taken on more urgency. While MSFT stock is a mature investment, it’s also relatively stable, making it an attractive anchor against possible volatility.
Invariably, whenever you discuss biometric stocks, you’re going to attract colorful segments of the investing population that will scream Big Brother. Therefore, I’m a bit hesitant to bring up Amazon. A few months ago, GeekWire wrote a piece about the e-commerce giant’s biometric identification system.
It works by “scanning the palms of participating customers, planning to ultimately let people make in-store payments, gain access to office buildings, and move quickly through stadium turnstiles by holding out a hand.” You can see where some folks might have problems with this technology. Again, it screams implants and 666 in the barcodes and whatever.
However, if you’re bullish on AMZN stock, this biometric element is yet another reason why shares could go higher in the long run. Aside from the convenience and safety factors — people can steal your wallet; your hand is a different proposition entirely — the reduced-contact attribute will be huge when we enter the post-pandemic phase.
Plus, do you hear that vacuum sound? That’s Amazon sucking the life out of small businesses everywhere. Yeah, it’s terrible but it’s also the reality that has made AMZN stock the behemoth that it is.
Billed as the “world’s leading provider of biometrics products and solutions,” Aware offers a comprehensive list of ID verification and management platforms. Pandemic or not, access management is a hugely problematic vulnerability for many businesses. As an organization, you want to make sure that your most sensitive information is accessed on a need-to-know basis. Aware provides solutions for both the physical and digital front, making AWRE stock supremely relevant.
Particularly, I really appreciate Aware’s efforts for border management and law enforcement. As you know, the years under the Trump administration were controversial because of its draconian law and order policies. However, we can’t just have a free-for-all society where borders are open, and regulations are not enforced. With Aware, you take some of the human element out of the security protocols, thereby mitigating controversy and simultaneously bolstering the profile of AWRE stock.
Moving forward, security and access will be extremely crucial as we fully open our tourism infrastructure. Plus, the ability to move people securely and quickly will be another factor to consider. With so much work to be done, I like AWRE stock longer term as part of a portfolio focused on biometric stocks.
Primarily a healthcare-related company, Nuance uses artificial intelligence and advanced digitalization technologies to streamline paperwork, allowing medical professionals to do what they do best: provide care to patients who need it.
Prior to the pandemic, NUAN stock was an incredibly relevant investment because the underlying business addressed the aforementioned paperwork dilemma. According to a 2018 Bloomberg report, medical billing has bogged down this industry, presenting distinct (and unnecessary) challenges. Of course, with the pandemic, there has never been a greater need for streamlining convoluted administrative duties.
However, this is about biometric stocks, so what’s the angle here for Nuance? As it turns out, the company is incorporating biometric solutions to automate the authentication process of contact center interactions. This technology should substantially cut down average handling time, thereby saving costs — this is an economic crisis too, after all.
And again, with so much that has transpired with the novel coronavirus, there’s a huge need to process every patient and their associated paperwork as quickly as possible. Thus, don’t ignore NUAN stock when going biometric.
Another comprehensive name among biometric stocks, OneSpan specializes in identity verification, e-signatures, authentication, fraud analysis and mobile app security. Similar to other companies on this list, these core businesses were critical before the pandemic due to the increasing role of digitalization in our society. But with a broader security vulnerability due to the telecommuting phenomenon, the viability of OSPN stock seems very enticing.
Personally, I believe there’s more than enough going on in our country and the developed parts of the world to keep organizations like OneSpan busy. However, the company is also looking ahead, eyeballing the digital frontier market of Latin America.
Over the years, I’ve written a few articles featuring Latin American organizations. One of the attributes of the region is its young worker base. But as OneSpan points out in its blog, connectivity remains an issue, which invariably stymies digital finance endeavors.
However, for Latin America to prosper, digitalization must happen at scale. When it does, investments like OSPN stock can skyrocket off the expanded security services market.
Precise Biometrics (PRBCF)
Not all biometric stocks are blue-chip giants, as Precise Biometrics proves. With a market capitalization of just under $51 million (425.8 million Swedish Krona), at the time of writing, PRBCF is the very definition of a micro-cap play. In other words, please don’t invest any more in Precise than you can afford to lose. This isn’t about badmouthing the company — you’ve just got to look out for No. 1 in this case.
However, if you don’t mind pulling the lever at the casino, PRBCF stock could jump higher based off the underlying business. Through its YOUNiQ identification system, companies can provide efficient and seamless access management solutions throughout their infrastructural footprint. True, the Covid-19 crisis has negated revenue-generating opportunities, especially in hard-hit countries in Europe. But over time, people will return to normal or somewhat normal.
When they do, security will become a prime concern, which may drive up PRBCF stock. Having said that, I just want to emphasize again that this is a gamble, not an investment. Engage accordingly.
An end-to-end identify verification platform, Ipsidy offers a full spectrum of programs designed to secure the digital transaction space. As PNC Insights noted, the rise in fraud and identify theft during the Covid-19 crisis has been “startling,” to use its words. So long as the recession continues without a robust answer, we can expect more such incidents, cynically driving up the case for IDTY stock.
Of course, the identity theft issue is incentivized because of the telecommuting shift. With more people doing business from home, e-commerce sales as a percentage of total retail transactions have soared. In other words, there are more points of vulnerability than ever, creating a goldmine of nefarious opportunities. And as economic desperation occurs, we’ll see an increase across various crime categories.
Therefore, biometric stocks like Ipsidy offer a dual revenue narrative. The consumer end clearly benefits from enhanced protections. But so do enterprises which deal with said customers — they want to make sure that they’re dealing with genuine clients, not those posing as such.
Given the relevance, it’s no surprise that IDTY stock has blasted to the moon this year. You may want to wait, though, given that a) this is a penny stock and b) you don’t want to end up holding the bag on this wild trade.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.