Volume 41

Volume 41 | January 23, 2024

Welcome to Brief 41 and the Access Control Executive Brief Focus 10 Index introduction!

I'm thrilled to introduce our first financial tool for the access control and smart lock industry: the Access Control Executive Brief Focus 10 Index (ACEB Index for short). You can find the ACEB Index ticker on our homepage and a dedicated webpage here with the ticker, the weighting, a performance chart, and the stats table.

Admittedly, I was surprised that a tool like this didn't already exist in our industry. However, this is a chance to bring a global tool that tells our industry story. The Access Control Executive Brief Focus 10 Index will be the first of many financial tools to come from the Access Control Executive Brief.

In this endeavor, I'm not alone. I've partnered with Tony Dong, a well-known figure within the security industry and a much bigger deal in the financial and investing community. I got to know Tony as he was a former guest writer from the Group 337 days. If you're unfamiliar with Tony, you're in for a treat. His story is both impressive and inspiring, and his work is unparalleled. I'm honored to have him as a partner in this effort.

Here is a bit more on Tony:

Tony provides us with equity research coverage for the access control industry. Tony's ETF analysis and reviews have been featured in multiple North American financial and investing media platforms, including U.S. News & World Report, USA Today Blueprint, TheStreet, Benzinga and The Motley Fool. Currently, he is also the Lead ETF Analyst for ETF Central, a partnership between the NYSE and Trackinsight. Previously, he also contributed content for the ETF platforms of the CBOE Canada and Nasdaq exchanges.

Before becoming a financial writer, Tony worked in corporate security management and served in the Canadian Armed Forces as a reservist. Later, he transitioned into a senior risk analyst role with a Canadian public transportation infrastructure entity, before quitting in March 2022 to pursue freelancing full time.

Tony earned a Bachelor of Arts degree in criminology from Simon Fraser University in British Columbia, Canada, graduating in 2019. In 2023, Tony completed graduate studies at Columbia University in New York City, earning a Master of Science degree in enterprise risk management.

His main financial credentials include the Canadian Securities Course (FINRA Series 7 Equivalent) and the Certified ETF Advisor (CETF®) designation from The ETF Institute.

I'm also pleased to announce that Tony will provide quarterly financial reports on the companies included in the index as part of upcoming Briefs following earning calls. More to come!

Let's get it into the Access Control Executive Brief Focus 10 Index!

As always…If, for any reason, I am not meeting your expectations, please feel free to let me know.

Thank you!

PS: I am sure some of you may forward this on but please do so sparingly and encourage others to sign up here. Thank you!

by Tony Dong, MSc, CETF®

As the world of property technology (proptech) rapidly evolves, the access control industry is becoming indispensable. With major companies like Amazon entering the arena through acquisitions and expansions, the industry's rising significance is undeniable. 

Yet, until now, there hasn't been a widely acknowledged benchmark to gauge the health and trends of this vital sector. Executives have faced difficulty articulating the macro trends of the industry to top-level decision makers, which makes gaining strategic buy-in difficult. 

To address this, we're proud to launch the Access Control Executive Brief Focus 10 Index. This index is our initiative to provide a comprehensive and up-to-date barometer for the industry, offering invaluable strategic insights for every executive.

Why We Created the Access Control Executive Brief Focus 10 Index

The world of finance often seems enigmatic to our industry, with terms like 'stock index' floating around. But what does it actually mean, and why is it important to know?

Simply put, an index is a tool that tracks the performance of a group of stocks. These stocks represent a segment of the market or a certain industry. Think of it as a dashboard that gives you a quick glimpse into how well that sector is doing. 

A common example is the S&P 500 index for the broad U.S. economy and market, or the Technology Select Sector Index for tech. 

The The Access Control Executive Brief Focus 10 Index is our custom solution for the access control industry, serving as a straightforward tool to understand the health and trends of the access control industry. It's meant to encapsulate the performance of key players in a single, easy-to-understand, constantly updated figure.

The index is designed to provide industry leaders with an up-to-date barometer of the sector's state of affairs, benchmark industry progress against the broader market, and keep a close watch on influential companies shaping our field.

How We Created the Access Control Executive Brief Focus 10 Index

The index begins with an equal weighting methodology. Each company, regardless of its market size, has an equal impact on the index's performance. This approach is crucial for several reasons:

• Visibility for Emerging Players: It allows newer, smaller companies with potential to disrupt the industry to be featured alongside established giants, giving a complete picture of the market.

• Balanced Representation: It avoids the skewing of the index towards larger companies, ensuring a balanced and holistic view of the industry.

• Reflecting Industry Dynamics: The equal weight approach mirrors the diverse nature of the Access Control sector, where both large and small companies play critical roles.

The index is rebalanced monthly, reflecting the dynamic nature of our industry and ensuring that the index stays current. It will be reviewed annually to add or drop constituents as necessary. 

The actual composition of The Access Control Executive Brief Focus 10 Index was deliberate. Each company was selected by a committee based on its impact and role in the access control sector, with respects to three criteria:

• Global Presence: Companies with significant global operations and influence.

• Pure Play and Diverse Businesses: A mix of companies solely focused on access control and those with broader business interests in the sector.

• Coverage of Various Verticals: Ensuring the index covers a broad spectrum of the industry, from traditional security systems to cutting-edge smart lock technologies.

What Goes into the The Access Control Executive Brief Focus 10 Index? 

The inaugural index constituents include the following companies:

1. Allegion PLC (ALLE) - Allegion stands as a global leader in the safety and security sector, particularly renowned for its innovative approach in smart lock technologies and comprehensive security systems. The company's influence extends across various markets, setting trends in access control technology and offering advanced solutions that cater to both commercial and residential needs.

2. dormakaba Holding AG (DOKA) - dormakaba is a pivotal force in the realm of secure and intelligent access solutions. With a wide array of products that include everything from door hardware to fully integrated access solutions, dormakaba is instrumental in driving the digital transformation of access control systems worldwide, thereby enhancing security and convenience in a variety of settings.

3. ASSA ABLOY AB (ASSA-B) - Covering a broad spectrum of access control products, ASSA ABLOY is synonymous with innovation in the field. Their product range spans from traditional mechanical locks to advanced biometric scanning devices and digital security solutions, making them a comprehensive provider for access control needs in both residential and commercial sectors.

4. Identiv Inc (INVE) - As a leader in digital security, Identiv's influence in the access control industry is marked by its cutting-edge smart card reader technology and robust cybersecurity solutions. Their products play a critical role in securing physical and digital spaces, reflecting a deep understanding of the evolving security landscape.

5. Honeywell International Inc (HON) - Honeywell's expertise in building automation and security systems has positioned it as a cornerstone in the access control landscape. The company offers a diverse range of products, including advanced surveillance systems and integrated security solutions, catering to a wide range of industries from residential to critical infrastructure.

6. SmartRent Inc (SMRT) - SmartRent is revolutionizing the integration of access control within smart home ecosystems. Their innovative approach to property management technology, especially for multi-family and single-family rental properties, is paving the way for a new era in smart home living, where convenience and security are paramount.

7. Newmark Security PLC (NWT) - As a significant player in the UK, Newmark Security PLC offers comprehensive solutions in electronic and physical security systems. They specialize in products and services that cater to the demanding needs of access control and security, providing robust solutions for a variety of sectors, including retail, finance, and healthcare.

8. NAPCO Security Technologies Inc (NSSC) – NAPCO's product line, which includes advanced access control systems, locking technology, and alarm systems, is integral in shaping the future of security and access control technologies, ensuring enhanced safety for both commercial and residential applications.

9. Motorola Solutions Inc (MSI) - Motorola Solutions extends its expertise beyond communication technologies to play a significant role in surveillance and access control. Their innovative products, including advanced video surveillance solutions and integrated command center software, are essential in enhancing public safety and security across various sectors.

10. Alarm.com Holdings Inc (ALRM) - Specializing in cloud-based services, Alarm.com is a leader in integrating smart devices into cohesive security systems. Their solutions, which encompass everything from intelligent video monitoring to energy management, are transforming the way homes and businesses approach security and automation, making smart security accessible and user-friendly.

The Bottom Line

Strategic, value-added insights begin with a comprehensive understanding of industry trends. The Access Control Executive Brief Focus 10 Index is designed to be the most crucial benchmark for gaining insights into the Access Control industry. It provides a snapshot that helps you keep your finger on the pulse of the industry, encouraging further exploration into trends and developments.