Identive Group: Buy, Sell or Hold?

I have always been a strong proponent of trying to determine the next hot trend, and then finding companies poised to benefit from the trend for investment.� One of these often overlooked trends in full force is radio frequency identification or RFID.� RFID uses tiny tags attached to objects for tracking and identification purposes.� As the name suggests, these tags emit radio waves that are transmitted to a reader for the required purpose.� In a somewhat Orwellian twist, the reader is named an interrogator with the tag called a less ominous label.� Proponents of the technology believe that one day these RFID devices will replace bar codes and many other methods of inventory control/tracking/identification.� Several European night clubs have even gone as far as offering RFID chips to be implanted into their VIP patrons as an easy way to allow past the velvet rope and pay for drinks.

A company on the cutting edge of this technology, Identive Group (Nasdaq: INVE ) is poised to benefit as this budding trend takes hold in a big way.� Originally know as SCM Microsystems, the company changed its name to Identive Group in June 2010. It provides products and solutions in the areas of physical and logical access control, identity management, and radio frequency identification (RFID) systems to governments, commercial and industrial enterprises, and consumers worldwide. The company operates in two segments, Security and Identity Solutions and Digital Media and Connectivity. The Security and Identity Solutions segment offers a range of contact, contactless and mobile smart card reader technology; access control products; and digital identity and transaction platforms, as well as systems that integrate physical access control, secure data storage and transmission, digital certificates, biometrics and digital video. It markets its solutions under the Hirsch Electronics and SCM Microsystems brand names to various industries in security, identity, contactless payment, e-health and electronic government services. This segment also offers a range of smart card-based productivity solutions, which include readers and software, for small and medium-size businesses under the CHIPDRIVE name. The Digital Media and Connectivity segment provides commercial digital media readers used in digital photo kiosks to transfer digital content to and from various flash media. In addition, the company provides automatic identification and RFID technologies, products, services and solutions used in the fields of security, identification and tracking applications. Identive Group sells its products directly, as well as through original equipment manufacturers, distributors, dealers/system integrators, value added resellers, resellers and Internet sales.

Full-year results for 2010 were impressive with revenue being up 105% and net loss decreased from $14.2 million to $9.5 million.� Sales more than doubled and significant projects were assigned from the Internal Revenue Service and the Department of Justice in the U.S.� This is not mentioning projects from China and Abu Dhabi keeping the company�s business pipelines full.

Technically, price has been slowly uptrending since September, 2010, and has spiked higher on the strong fourth-quarter and yearly results.� Support rests at $2.47 and resistance is presently sitting at $3.50.