Wal-Mart first taught us the power of supply chain economics a generation ago. But surprisingly FEW advances have been made in the field since the bar code in 1974. Now radio frequency identification tags the size of a grain of rice are able to emit unique signals that tell you precisely where everything is in your supply chain. International Paper is already saving millions by tracking each tree through the supply chain until it hits your local hardware store. Meat packers now track a cow from birth to burger.
But what happened in just the last few months turned RFID from "cool" to vital. First, on October 8, the U.S. Army decided that all 23,000 of its suppliers must begin electronic tagging. The savings to the taxpayer of this one move will mount into the BILLIONS.
Secondly, the question of which RFID system would be "standard" was settled. There's going to be ONE standard. (By the way, there are four or five different ways to play the RFID revolution. You need to read our report, "The Tracked Economy: How to make a fortune from the RFID Revolution" carefully, because I outline opportunities in healthcare, homeland security, and marketing that will equal the opportunities in manufacturing. But manufacturing will take off first -- so let's focus on that here.)
Very few joys in life come close to that of owning a $100 stock -- that you bought for $10. Our top RFID company will give you that experience -- only better, and here's why: This company is a billion-dollar (sales) outfit known on Wall Street as an exceptionally DULL supplier to the automotive industry. YAWN. One obscure division of this company happens to have the total SOLUTION for mandated RFID systems. NOW -- today -- and ready to ship in MASS quantities.
That's right: they are one of just a very few companies on EARTH able to meet this worldwide technology mandate that 75,000 Wal-Mart suppliers are going to be scrambling and clawing for in 2004.
Best of all, this is a low-risk stock: This is the ONLY way, as a supplier, you can get your RFID systems up in time for Wal-Mart's deadline. And this company is sitting on $240 million in cash with no long-term debt; the Street valuation is absurdly based on automotive manufacturing metrics; and you get in on the spin-off I.P.O at a time when other investors would kill for just one share.
When electronic tags are just in LoJacks, the anti-theft device, there is not a lot of information you have to keep track of. But when there's an electronic tag on every ballpoint pen, you need to control billions of pieces of information instantly, and our second pick -- one of the fastest growing companies in the U.S. -- does just that.
The fourth "tag stock" we detail for you in "The Tracked Economy" provides the missing link between the warehouse and the back office. This company has developed the first TRANSDERMAL electronic tag. This is the technology that tracks PEOPLE, not things. Babies in the hospital; criminals in Mexico; terrorists in Afghanistan. All very George Orwell. But all very profitable in the next few years. One day, this company will put the money launderers out of business -- because it has the technology to turn every banknote into a radio antenna!