Friday, October 16, 2015

Fund Manager Remains Bullish on IDI $IDI

In his latest quarterly investor letter, Threshold Capital's Peter Delgado discusses his latest thoughts on IDI (ticker: IDI) (published with permission):
IDI Inc. (NYSEMkt: IDI) is currently clients’ largest position.
To review, over the past year, IDI has transformed itself into an emerging leader in the data fusion industry.
Data fusion involves integrating and statistically matching metrics from disparate data sets based on common variables, the underlying principle being that the common characteristics can reliably predict patterns and identifying relationships.
IDI delivers otherwise unattainable insight into the ever expanding universe of consumer and business data through its proprietary linking technology, advanced systems architecture, and massive data repository.
New executives and the Board of Directors have initially targeted the risk management and marketing and data analytics sectors, which it defines as having a combined market value estimated at over $13 billion.
IDI addresses the increasing need for actionable intelligence to support the risk management industry for due diligence, risk assessment, fraud detection and prevention, authentication, verification and more.
Additionally, IDI’s cross functional core systems and processes are designed to deliver products and solutions to the marketing industry, and to enable the public and private sectors to layer IDI’s solutions over their own unique data sets.
The Company raised $10 million in an equity offering with a sophisticated investor during July 2015 in order to develop and launch its next generation product – IDICore (whose release is imminent).
IDI is now led by Executive Chairman Michael Brauser, a pioneer in the data fusion industry since its inception, Derek Dubner (formerly held Executive positions at Naviant which was acquired by Equifax, and Seisint, which was taken over by Lexis Nexis) now Chief Executive Officer of IDI Inc., and Chief Scientific Officer Ole Poulsen.
Mr. Poulsen along with data fusion visionary, the late Hank Asher both built the early products in the data fusion industry and their legacies remain today at larger companies – specifically Lexis Nexis and TransUnion (product is under Transunion’s TLO division).
Again, IDI Inc. currently reminds me of another business in this specific space called Choicepoint Inc. and another dynamic company named Palantir Technologies. Palantir is currently a private company who just raised funds at a $20 billion dollar valuation; Choicepoint was acquired by Reed Elsevier in February 2008 for $3.6 Billion. 
Miami, FL based billionaire, Dr. Philip Frost, continues to be IDI Inc.’s largest shareholder, and he persists in increasing his stake in the company by purchasing stock in the open market.
Threshold Capital believes that IDI Inc., now led by individuals primarily responsible for the data fusion business since its infancy, will prove to be an outstanding investment for clients.

The rest of Threshold Capital's investor letter is here.

More analysis of IDI is here.

Disclosure: LONG

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