Mairs & Power Small Cap Fund Comments on Vasco Data Security

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May 22, 2015

Vasco Data Security (VDSI) has also been a strong performer for the Fund over the longer term, but in the first quarter was down. We believe the pullback was primarily due to profit taking following the stock’s phenomenal 2014 performance. While the U.S. financial industry has been slow to adopt anything other than rudimentary two-factor authentication when consumers log in to their bank and brokerage accounts (e.g. “What is your mother’s maiden name?”), multi-level authentication is widely utilized in other parts of the world where Vasco holds a leading share. Vasco’s security offering includes number code generators deployed with or without a card reader or PIN key pad. In addition, the company is now offering a system that uses a built-in camera and Quick Response (QR) codes generated on a consumer’s computer, tablet, or phone screen to increase security and simplify manual keypad entry. Longer term we remain very excited about the company’s position in online ID and transaction verification.

From Bill Frels (Trades, Portfolio)’ Mairs & Power Small Cap Fund Q1 2015 Commentary.