Four names of public companies to check out: Zebra Technologies ( ZBRA) and Printronix ( PTNX), both bar-code printer makers that are pushing into RFID printing; Checkpoint Systems ( CKP), a maker of integrated systems for retail security systems; and Symbol Technologies ( SBL), a maker of the wireless networks needed to collect data from RFID tags. My preference is for Zebra Technologies and Symbol Technologies, but it's slight and I'd watch valuations carefully among RFID companies. This could get enough hype to drive stocks to wildly inflated prices.
If You Collect the Data, You Must Manage the Data
RFID is just one example of a trend that is creating more and more data on more and more products and people. The challenge is managing that data so that authorized users can extract useful information in a timely manner while keeping the wrong people from accessing or appropriating the data. On the data-management end, that means plenty of work for logistics companies such as Manugistics ( MANU), credit card and debit card transaction leader First Data ( FDC) and consumer-credit data collector Equifax ( EFX). On the security and privacy side? Well, the field is wide open. Consumers increasingly demand some assurance that the information collected on them remains private. And every day seems to bring a new privacy challenge, such as preventing eavesdroppers from stealing data moving on RFID and other wireless networks. These tasks aren't trivial: Keeping data out of the wrong hands and putting it in the right hands -- especially when the definitions of right and wrong change with each data type and with context -- is a computational nightmare. Some companies to check out in the area are Netegrity ( NETE), Entrust ( ENTU), RSA Security ( RSAS) and, of course, the big gorilla, IBM ( IBM). My preference here: Manugistics and Netegrity. At least, those are the stocks I'd start my research with. Does this all add up to enough of a next big thing to put technology shares back in the lead? I think the next big things may be strong enough to lift the shares of the tech stocks I've named here. But the market as a whole needs help from a wider group of technology companies. I'd be more comfortable predicting a good year in 2004, however, if so many longtime leaders such as Hewlett-Packard ( HPQ), Oracle ( ORCL) and Sun Microsystems ( SUNW) didn't continue to struggle.
Changes to Jubak's Picks
Sell R.R. Donnelley. Shares of R.R. Donnelley ( DNY) have bounced back from the Nov. 9 news that the company would acquire printer Moore Wallace for $2.8 million in stock. The shares continue to move ahead slowly, but the stock is near the top of its recent price range. I'll take my profits here, rather than waiting for the shares to hit my March 2004 target of $30, now about 6% away. I'm selling with a 13% gain since I added the shares to Jubak's Picks on May 30, 2003. (Full disclosure: I'll be selling my personal position in R. R. Donnelley two days after this column is posted.)