Airline scare spurs security stocks

12/24/2001

By ADAM GELLER
AP Business Writer

NEW YORK — Investors bought up stock in security technology firms Monday, the first trading session since a weekend scare aboard an American Airlines flight in which a passenger allegedly tried to detonate explosives hidden in his shoes.

Shares of InVision Technologies and OSI Systems jumped 15 percent and 12 percent, respectively, with stock in other security tech firms experiencing smaller increases.

The rise in those stocks continued a surge that began after the Sept. 11 terrorist attacks, as investors bet those companies and others will be the beneficiaries of a new wave of spending on airport and airplane security.

OSI, an optical scanning firm based in Hawthorne, Calif. whose stock was trading at about $4 before the attacks, jumped to more than $23 a share a few weeks ago before settling again.

On Monday, the company's shares were up $1.70 to $16.20 in trading on Nasdaq.

Shares of InVision, a manufacturer of explosive and drug detection systems based in Newark, rose $4.21 to $32.72. It was trading at around $3 a share before the attacks, and has since peaked above $47.

But Monday's jump in stock prices, and the surge of the preceding months, has mostly been a reflection of investors' attention to news events, rather than any significant change in orders to the companies, said Jeff Rosenberg, an analyst with William Blair & Co. in Chicago.

``The enthusiasm kind of waxes and wanes depending on non-fundamentals,'' Rosenberg said Monday. ``Investor sentiment can drive a lot of price movement.''

Rosenberg, who tracks OSI, said it is one of several companies that could benefit as the U.S. transportation officials look to step up security measures at the nation's airports. But those decisions have not yet been made, he said.

The rise in shares Monday follows the forced landing Saturday in Boston of an American Airlines flight that had been bound from Paris to Miami. Passengers aboard the flight forcibly subdued a man after he lit matches, apparently trying to ignite explosives found hidden in his shoes.

The man, identified in court papers as Richard C. Reid, 28, was ordered held in federal custody Monday by a Boston judge.

Stock in other security technology firms also rose Monday.

Shares of Visionics Corp., a company based jointly in Minnetonka, Minn. and Jersey City, N.J. specializing in face-scanning technology, were up 79 cents to $15.96, roughly a 5 percent rise.

Shares of Viisage Technology, a Littleton, Mass.-based biometrics firm, rose 65 cents to $10.75, a 6 percent rise.