What Do I Need to Know About RFID Stocks?

One of the biggest reasons for the recent popularity of RFID is security. It goes without saying that defense and security run pretty high on the national agenda, and with its implementation in U.S. passports, the technology is poised to prove itself on one of the most public security battlegrounds out there -- the nation's borders.

Rough Year for RFID

Despite reasons to believe that RFID's poised for lift-off, 2007 hasn't been a kind year to RFID stocks. Indeed, pretty much all of the "pure RFID plays" have seen a rough time: Applied Digital Solutions ADSX and Digital Angel DOC each saw share prices drop over 40% since January, and Zebra Technologies ZBRA and Intermec IN have experienced somewhat bumpy rides during those ten and a half months.

And despite the fact that RFID was proffered by some to usher in a new era of tech IPOs , VeriChip CHIP has lost over 30% since they went public earlier this year and Alien Technologies -- well, they actually withdrew their IPO filings because of market conditions (at least for now).

Not everyone in RFID is hurting, though. The OTC -traded Axcess International AXSI is up over 40% since January.

Whether or not RFID stocks are seeing a necessary correction or an ominous sign of things to come, it should go without saying at this point that you should at least approach RFID with a bit of caution.