James Henry did what no others did right after September 11: He took his company, Diversified Security Solutions (DVS
), public -- at 7 a share. The stock hit 8.20 in April, 2002, but has since sagged to 6.90. The company provides electronic security systems and upkeep to government and business. It won a big contract last month to upgrade security at New York's three airports. And a source close to the company says it has bagged business with several other outfits, including DuPont. Sal Lifrieri, who was Mayor Rudolph Giuliani's security director, is now executive vice-president at Diversified. According to Sven Monberg of Gunn Allen Financial Group, which took Diversified public on Nov. 1, "business has been growing rapidly, but the stock has yet to catch up because of its low capitalization and lack of Street following." He sees Diversified, which earned 5 cents a share in 2002 on revenues of $18 million, making 35 cents in 2003 on sales of $35 million. He says upcoming contracts to install electronic security systems at bridges and national landmark buildings could see the stock double in 12 months. "It's a pure play on homeland security," says Monberg.
Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial
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