Packaging Wire News: ElectroIQ.com

Weekly: Wave Systems rises in strong trading with rising open interest, continues strong monthly trend



News Bites US Markets
February 19, 2011

Wave Systems (WAVX.O), NASDAQ's 9th largest Computer Integrated Systems company by market capitalisation, rose for a second week on Friday. The share price increased 9.0c (or 2.2%) to US$4.17 in the week ending Friday February 18. Compared with the NASDAQ-100 index which rose 13.3 points (or 0.6%) in the week, this represented a relative price change of 1.6%.

TECHNICAL ANALYSIS

Uptrend

Price Trend: in the last six months the number of rises outnumbered falls 17:9 or 1.9:1.

Relativities: in the NASDAQ market of 2,388 stocks traded today, the stock has a 6-month relative strength of 89 which means it is beating 89% of the market. A price rise combined with a high relative strength is a bullish signal.

Moving average price (MAP): the price to 200-day MAP ratio is 1.36, a bullish indicator. In the past 200 days this ratio has exceeded 1.36 forty-six times suggesting further upside. The stock is trading above both its MAPs and the 50-day MAP of US$3.999 is higher than the 200-day MAP of US$3.061, a bullish indicator. The 200-day MAP has increased to US$3.061. An increase is another bullish indicator.

Exponential Moving Average Price (EMAP) [with higher weightage to recent prices]: the price to 50-day EMAP ratio is 1.1, a bullish indicator. In the past 50 days this ratio has exceeded 1.1 39 times suggesting further upside. The 50-day EMAP has increased to US$3.876. An increase is another bullish indicator.

Breakout: in the last six months the stock has hit a new 52-week high once. The bulls are maintaining control with price open, high, low and close exceeding yesterday's levels.

Support: the support price is hovering at the US$3.65 level. Volume traded at the fragile support price zone was 0.2 times average during the three occasions when the support price was breached. In the last one month the first low was at US$3.65 on Feb 04, the next at US$3.65 on Jan 31. The third decline halted at US$3.70 on Feb 07.

Resistance: resistance is apparent at US$4.95. However, selling pressure at that level has been weak; volume was 0.3 times average during the single occasion when the resistance price was breached in the last one month. In the last one month the high was at US$4.95 on Jan 19.

PRICE VOLUME DYNAMICS

Volatility: the stock traded between an intraweek low of US$4.12 and a three-week high of US$4.50.

Relativities: in the NASDAQ market the stock has a trailing week relative strength of 66.21 indicating it is trailing 33.79% of the market.

Volume and turnover period: there were 4,009,701 shares worth US$17.5 million traded. The volume was 1.3 times average trading of 3,053,374 shares. The turnover rate in the 12 months to date was 223.6% (or a turnover period of 5 months).

% Discount to high: the last price is at a discount of 21.5% to the 12-month high of US$5.31 one month ago on 13 Jan, 2011.

Volume weighted price (VWP): the price is at a premium of 3.9% to the 3-month volume weighted average price of US$4.015. Given that this premium has exceeded 3.9% twenty-one times and been under 3.9% six times in the last year, the upside:downside probability is estimated at 21:6 or 3.5:1.

THIS WEEK'S PRICE PERFORMANCE RANK IN SECTORS

The stock is in 2 sectors.

The following index and sector rose setting the trend for its rise of 2.2% for the week (rank by percentage price change of stock for 1 week;12 months in sector/index in brackets):

Total NASDAQ Market (rank 740;561 out of 2521) which was up 17.4 points or 0.9% to 1,993.0,

NASDAQ-100 index which was up 13.3 points or 0.6% to 2,392.5

The stock's rise went against the trend set by Computer Integrated Systems sector (rank 4;7 out of 21) which was down 6.9 points or 0.3% to 2,322.7

The Computer Integrated Systems company sector is the 48th largest by market capitalisation out of NASDAQ's 69 sectors. It is made up of 21 publicly listed companies with a combined market capitalisation of US$10 billion. In 2010 earnings for the sector grew 5.9% compared with those of 2009. The main players in the sector include MICROS Systems, Mentor Graphics, Radiant Systems and FARO Technologies.

SHAREHOLDER RETURNS

Trailing five weeks: the stock fell thirteen times (52% of the time), rose ten times (40% of the time), was unchanged once (4% of the time) and was untraded once (4% of the time). The volume was 1.3 times average trading of 15,266,872 shares. The value of US$1,000 invested five weeks ago is US$908 [vs US$1,031 for the NASDAQ-100 index] for a capital loss of US$92.

Trailing thirteen weeks: the stock rose thirty six times (55% of the time), fell twenty five times (38% of the time), was unchanged three times (5% of the time) and was untraded once (2% of the time). The volume was 1.6 times average trading of 39,693,868 shares. The value of US$1,000 invested thirteen weeks ago is US$1,248 [vs US$1,122 for the NASDAQ-100 index] for a capital gain of US$248.

Trailing Two Years: the value of US$1,000 invested two years ago is US$6,224 [vs US$2,024 for the NASDAQ-100 index] for a capital gain of US$5,224.

FINANCIALS

Quarterly Report:

In the quarter to September 30, 2010 total revenue of US$6.7 million; net loss of US$1.2 million.

Annual Report for the year ended December 31, 2009 (year-on-year comparisons with previous corresponding period)-

Favourable Changes: total liabilities to total assets down 53.03% to 1.3; Sales to total assets up 16.21% to 3.0.

Unfavourable Changes: loss of $US3.3m; EPS reduced 86.84% to -5.0 U.S. cents; operating cash flow is negative; total number of shares outstanding up 23.74% to 68,526,572; Retained earnings to total assets down 45.27% to 5,500.0%.

Major Common Size Ratios: total current assets to total assets up from 84.01% to 94.14%; current debtors to total assets up from 49.62% to 60.84%; cash to total assets up from 27.74% to 30.03%; fixed assets to total assets down from 11.91% to 3.75%; other non current assets to total assets down from 4.08% to 2.11%; cost of goods sold to sales up from 1.0% to 2.76%.

OPEN INTEREST TREND AND INTERPRETATION

Open interest hit a nine-month high.

Same day trend: open interest advanced for a fifteenth straight day. Open interest rose 1.4% from 15,689 to 15,907. Combined with the price falling 5.0 this suggests the market is weak.

Trailing one week trend: open interest rose for a third week. Open interest soared 21.1% from 13,136 a week ago while the stock slumped 6.1% from US$4.08 a week ago. Combined with the falling price this also suggests the market is weak.

Trailing one month trend: open interest soared 18.3% from 13,443 a month ago while the stock plummeted 9.9% from US$4.89 a month ago. Combined with the falling price this also suggests the market is weak.

Open interest as % of issued capital: 1,590,700 shares, representing 2.3 of the issued capital.

[ranked 367 out of 1060 stocks in descending order]

Put:call ratio: open interest contracts on exchange traded options included 1,303 put contracts and 14,604 call contracts.

The put:call ratio was 1:11.2, up 2.2 for the day, up 7.9 in the past week and up 24.7 in the past month.

Top traded call options [volume of contracts in brackets; 1 contract is 100 shares]

Exercise US$2.50; Expires Jul 16: US$1.95 down 9.3 [25]

Top traded put options [volume of contracts in brackets; 1 contract is 100 shares]

Exercise US$5.0; Expires Feb 19: 85.0c up 13.3 [10]

MARKET SHARE

Wave Systems vs Computer Integrated Systems sector [Computer Integrated Systems sector Total in Brackets]

MCap of US$285.8 million[2.9% of Aggregate Sector MCap of US$10 billion; up from 2.7% in the previous year.]

FUNDAMENTALS

P/S: The price/sales ratio is 15.1.

ISSUED CAPITAL

Based on 68,526,572 issued shares the market capitalisation is US$285.8 million.

ACTIVITIES

Wave Systems Corp. develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, www. trustedcomputinggroup. org (TCG). Specifications developed by the TCG are designed to address a range of digital security issues. These issues include identity protection, data security, digital signatures, electronic transaction integrity, platform trustworthiness, network security and regulatory compliance. The EMBASSY Trust Suite is a set of applications and services that are designed to bring functionality and user value to TPM-enabled products. The Wave TCG-Enabled Toolkit is a compilation of software designed to assist application developers writing new applications or modifying existing ones to function on TCG-compliant platforms.

TOP MANAGEMENT

The chief financial officer is Gerard T. Feeney, the chairman is John E. Bagalay Jr., Ph.D. and the chief executive officer is Steven Sprague.

REPORTED SELLING

Reported Selling:

March 19: Wave Systems insider sells

Wave Systems (WAVX.O) insider Sprague Steven K sold 10,000 shares worth approximately US$37,700 on March 17, 2010. The last price was USD3.77.

March 19: Wave Systems insider sells

Wave Systems (WAVX.O) insider Sprague Steven K sold 3,000 shares worth approximately US$11,310 on March 17, 2010. The last price was USD3.72.

March 19: Wave Systems insider sells

Wave Systems (WAVX.O) insider Sprague Steven K sold 10,000 shares worth approximately US$37,700 on March 17, 2010. The last price was USD3.78.

March 19: Wave Systems insider sells

Wave Systems (WAVX.O) insider Sprague Steven K sold 10,000 shares worth approximately US$37,700 on March 17, 2010. The last price was USD3.74.

March 19: Wave Systems insider sells

Wave Systems (WAVX.O) insider Sprague Steven K sold 7,000 shares worth approximately US$26,390 on March 17, 2010. The last price was USD3.8.

BUSINESS NEWS ROUND UP

The last 5 snippets were:

February 14: Wave Customers PricewaterhouseCoopers and Dendreon Showcase Trusted Computing Deployments at RSA Conference 2011

Lee, MA & San Francisco, CA (RSA Conference, Booth 939) - February 14, 2011 - Wave Systems Corp. (NASDAQ:WAVX www. wave. com) announced today that PricewaterhouseCoopers (PwC) International Limited's Karl Wagner will headline a Monday seminar sponsored by the Trusted Computing Group, kicking off an active week for the company at RSA Conference 2011, Feb.

February 14: Wave Systems: Seagate Tops 1 Million Mark in Shipments of SelfF-Encrypting Hard Drives for Laptop PC'S and Data Center Servers

http://www. wave. com/news/press_archive/11/110214_RSA_Announcement-Seagate. pdf Source: Company Website

February 14: South Carolina Department of Revenue Selects Wave To Protect Taxpayer Information

Lee, MA - February 14, 2011 - Wave Systems Corp. (NASDAQ:WAVX www. wave. com) today announced that the South Carolina Department of Revenue (SCDOR) has chosen Wave's EMBASSY(Registered) software to manage data security for its fleet of laptops. Agency personnel routinely handle confidential taxpayer data-from property records to social security numbers and tax returns.

February 07: Wave Systems: ABA Publishes Data Breach & Encryption Handbook

CHICAGO, Feb. 7, 2011-- Cybersecurity risks pose some of the most serious economic and national security challenges of the 21st century. A new book, Data Breach and Encryption Handbook, published by the American Bar Association Section of Science & Technology Law, takes an in-depth look at the problem of escalating data breaches and its legal ramifications. Informative and practical, the book was written to help attorneys, global executives, technology professionals and policy-makers understand the complexities and root causes of data breaches, as well as to demystify encryption and provide practical solutions to prevent data breaches.

February 07: Wave Chief Scientist Robert Thibadeau Co-Authors American Bar Association's Data Breach and Encryption Handbook

Lee, MA - February 7, 2011 - Wave Systems Corp. (NASDAQ:WAVX www. wave. com) announced today that Wave Chief Scientist Robert Thibadeau has contributed to the American Bar Association's Data Breach and Encryption Handbook, which examines the ever-growing problem of data breaches, the legal complexities surrounding data breach notification laws, and the encryption solutions that can prevent sensitive data from being compromised in the first place.

Source: www. BuySellSignals. com

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