Forwardly Inc (FORW)

[Carter]

GRDO: State of the Industry

The key metric which made me interested in GRDO as a "buy" last year was the alarming trend of identity thefts increasing in # and dollar-amt damages. Everywhere we turn in the media we see front page articles on this topic. This trend is what's been fueling the growth of Identity Theft Protection co.'s such as Lifelock, and many others. This trend is the reason why firms such as Goldman Sachs, Kleiner Perkins (KPCB), etc. etc. have made investments in co.'s in this industry.

If properly positioned (ie with the requisite secure & accredited website, internal systems, and marketing), ID Theft Protection co.'s grow very quickly - and if marketing & internal costs are managed appropriately - profitably, as well.

If ID Theft in America (and moreover, worldwide) continues to escalate, growth of the ID Theft Protection industry will certainly continue to trend in the same direction. This is what has been proved out so far, and it's the bet big money is continuing to make.

So what is the most up-to-date trending analysis of identity theft?

This is an excerpt from a very recent research report by Javelin Strategy & Research on the topic, which I found linked in this cnn.com article: http://www.cnn.com/2010/TECH/04/14/oppmann.off.the.grid/index.html?hpt=C2


Overview
ID Fraud continued to rise in 2009, with Javelin finding there are more victims than in any period since the survey began in 2003. Driving that increase was new accounts fraud, which showed longer periods of misuse and detection and therefore more dollar losses associated with it than any other type of fraud. Meanwhile the consumer costs, the dollar amounts the victim pays on average out-of-pocket, reached an all time low. The Javelin 2010 Identity Fraud Survey Report provides a detailed, comprehensive analysis of identity fraud in the United States in order to help consumers and businesses better understand the effectiveness of methods used for its prevention, detection and resolution
https://www.javelinstrategy.com/research/brochures/Brochure-170


Guard Dog's services are directly targeted at reducing what I've highlighted in bold in the excerpt above: longer periods of misuse and detection in which victims get their identity & money stolen, and their credit ratings negatively affected. This is where the most damage gets done - and it's why people are turning to these ID theft protection services, and increasingly so - based on the data collected for independent analysis such as this.

Therefore, the state of the industry is extremely strong, in terms of ID Theft Protection being an increasingly relevant service to more and more Americans, and people all over world.

What I think we'll see next are industry specific threats needing to get addressed - where ID Theft Protection will become both more broadly adopted and more niche-focused. These are very "bullish" trends for GRDO, and judging by the platform they've developed to capture & manage the business, they are geared up for the kind of high growth this industry is - and will be - experiencing in the years ahead.