Dell Deal Gives Absolute Software Well-Needed Boost

As many as 12,000 laptops are lost every week and up to 600,000 go missing in U.S. airports each year, according to a new study from the Ponemon Institute. Meanwhile, among professionals that carry notebook computers, more than half of them carry confidential information, but 65% of them don’t take steps to protect it.

So while this may be bad news for those individuals and the companies they work for, it presents an opportunity for computer security experts like Vancouver-based Absolute Software Corp. (ALSWF.PK).

Loose security and theft are among the reasons Dell Inc. (DELL) has unveiled its new ProSupport service package for laptops that allows customers to track and recover stolen notebooks as well as delete the contents remotely. Absolute is providing the services and this business should provide a much-needed boost for a stock that has fallen more than 40% in 2008.

Versant Partners analyst Tom Liston told clients:

This deal is the catalyst the market should have been waiting for – an international deal with a market leader.

He also maintained a “strong buy” recommendation and C$21 price target on Absolute shares.

He noted recent industry data that pointed to strong growth for notebook computers from Dell at 20% year-over-year, with the company second to only Hewlett-Packard Co. (HPQ)  in market share with 15.4%.

Mr. Liston said the fact that Dell is in charge of sales and marketing, while Absolute has the lower costs associated with service, means the deal will carry a high cash flow margin for the software firm.