This teaser pitch is from Manny Backus, who is promoting a new(ish) service called Triple Digit Returns — which looks like it’s a weekly advisory that recommends a different stock each week for 100%+ potential gains.

This ad has been circulating since early in the year, and continues to drive questions to our inbox today — so I thought I’d re-share the solution that we published back on February 3. The new ad from Backus is still the same as it was then, from what I can tell from a quick scan, and the email ad running now is calling this the “easiest stock buy you’ll every make.”

Curious? Yes, the hype is strong in the ads — here’s how the latest email introduces the idea:

“There are very few times in investing where I will yell BUY, BUY, BUY at the top of my lungs.

“But this is undoubtedly one of those times.”

That’s not exactly how he put it back in February, but the rest of the ad is essentially the same — and he still says he sees 850% gains “in months.” So far it’s been about four months, and they’ve reported earnings that were entirely non-shocking and the stock is still in roughly the same neighborhood it was then. What follows has not been edited or revised or updated, though I did skim over the recent earnings reports and didn’t see anything that changes my mind about the stock (feel free to let me know if you think I’m missing something, just use the friendly little comment form at the bottom).

So without further ado, here’s our piece from February — and we’ve kept the original discussion stream at the end, since our readers often add valuable comments and insights:

—-what follows is unchanged since 2/3/15—-

It’s all about biometrics, here’s how he gets our attention:

“How to Buck America’s $23.5 Billion Biometrics Mega Trend for 850% Gains

“Thanks to one small company, in the middle of Massachusetts, the world of biotech is changing at a rapid pace…

“And it could mean ‘retire now’ money for YOU….”

So… biometrics and biotech? What could be more exciting? And no, I don’t want to “retire now” — Stock Gumshoe is too much fun to give it up — but, well, I wouldn’t say “no” to a few more weeks on the beach every year. So is this “one small company” going to get that for me? Let’s check the clues:

“In Bedford, Massachusetts sits a building most people never have reason to notice…

“Yet what the residents of this quiet town (and most other Americans) don’t realize is that world-shaping decisions are being made at this very location every day….

“So what goes on inside this place?

“Well, it’s one of the hottest scenes on the planet for advances in biometrics.

“And while that may not sound like a big deal at first, consider this: The company that leases this building is set to pay out gains up to 850% due to the technology it’s currently creating.

“And despite the small size of this company, it’s currently leading the charge in a market that’s on its way to being worth $23.5 billion.”

Backus says that this building where “world-shaping decisions are being made” looks like something out of “Star Wars”, which is a bit of a stretch… here’s the aerial view of the building, in case you’re curious:

So yes — hold onto your hat! — it happens to not be rectangular from an aerial view. We shudder at the futuristic world we live in.

Um, hold on. This is, I regret to inform you, simply a two-story office building of incredible blandness that would fit in nicely in any suburban office park in America, right between the DoubleTree and the Applebee’s (it is, actually, next to a DoubleTree… I haven’t confirmed the presence of an Applebee’s). Here’s the front view of the building from Google Maps Street View if you want something more mundane:

And there you have it, your answer. So yes, it is Aware, Inc. (AWRE), the biometrics company that I suggested to the Irregulars a couple years ago (and took off the list just this year when I did my annual review).

And no, I don’t mean to besmirch office parks — there are a lot of interesting tech companies headquartered in the same neighborhood as Aware in Bedford, which is a Boston suburb… including iRobot (IRBT) and Hologic (HOLX). And their headquarters buildings are also quite boring.

So what is it that Manny Backus thinks is so exciting about Aware? I can tell you that the reason I was interested a couple years ago was that they were in the process of streamlining, selling off old technologies and patents (mostly having to do with DSL line testing) and generating a huge amount of cash, and that they were paying out that cash to shareholders with special dividends and shrinking the company, which would end up being a biometrics software firm with a decent pile of patents and a very, very small but profitable sales base. Which is pretty much what happened.

I took the stock off our list in January because, though risk remained fairly low (they still have a lot of cash, they’re still profitable), there wasn’t any sign I could see in the financial reporting of a real, growing business with big upside in biometrics. There could be something there, to be sure, or they might pay another big dividend at some point with that extra cash they have — and the stock has bumped up by close to 10% since I looked at it a few weeks ago — but any performance improvement is really not in the numbers yet.

They still have about $1.90 in cash per share, so unless they do something stupid with the cash the stock shouldn’t fall much more than 50% from here, it’s just that the business didn’t seem to me to be generating much traction — and if you back out the cash it’s trading now at about 15X trailing “real” earnings (not including the one-time patent sales), so it’s not particularly expensive… I just didn’t see enough to make me think there’s a real, sustainable level of earnings growth.

And, you know, for us “boots on the ground” investors that parking lot doesn’t look very full, so they must not be doing very well (just kidding on that one — I have no idea when the Google Street View van drove by Aware’s headquarters, it could have been a Sunday morning in 2013 for all I know… and no, I’m not going to drive two hours to the traffic-choked Boston suburbs to check it out).

Here’s how Backus describes the company:

“… biometrics covers everything from fingerprint scanners to facial recognition to DNA analysis.

“Well, the company I’m telling you about today has cornered the biometrics market as they provide the software that runs ALL of these devices.

“In short, you can’t scan a fingerprint without the software to fuel the device. Same thing with DNA analysis, voice and facial recognition, and anything else you can imagine.

“And they don’t provide the software for just one niche market either.

“These guys have their hands in just about EVERYTHING.

“Their proprietary software is used in a wide array of markets:

• Border Control – immigration, passports, national ID cards
• National Defense – handheld ID devices
• Secure Credentialing – personal identity verification cards
• Law Enforcement – FBI systems
• Access Control – building access

And a little bit more:

“They currently compete with huge firms like Lockheed Martin, NEC, 3M and Hewlett-Packard.

“But it hasn’t fazed them one bit.

“And that’s because this company’s software is not only of a much higher quality than anything the ‘big boys’ can produce… but they can offer it a much lower cost.

“So they continue to bring in contract after contract across the globe as clients all over the world seek out the best produce for the lowest cost.”

And… other than talking up his “Play the Biometrics Boom for 850%” special report, which apparently is the first report from this Triple Digit Returns service, that’s about all he says about them. Other than that he can say somehow say both that they’ve “cornered the market” and that they “compete with Lockheed Martin and Hewlett-Packard” in the same breath.

There is large insider ownership at Aware, including a trading firm called Ronin Capital that I’ve never seen elsewhere, and there is one very strong quantitative fund with a big position (DFA), but there’s been no real insider buying over the last six months or so… and, frankly, I keep looking at their results and being bored — they have kept earnings growing a bit, in part by selling off some remaining DSL patents, but the patent selling should be about done now and the operating earnings just aren’t growing very fast — this is a small company, so their expenses to build a sales force and push new products might be substantial, though I don’t really know what the competitive landscape is for the biometrics and imaging software they are pushing.

On the other side, to be fair, they are growing and they don’t have to grow that fast to justify a PE of 15 ex-cash, particularly in what should be a highly scalable business like software, but it’s a tiny company (market cap just over $100 million, even including the $40+ million in cash) and I have no real insight into how they’re doing when it comes to getting new customers, competing in the software business (they primarily sell software for imaging and biometrics data management), or what their expectations are for the future (they don’t have conference calls and don’t give any earnings guidance).

Given that, I don’t see any real reason to bet on whether the company will fail or succeed unless you can get some better information or you know the actual business, including the competitive landscape, really well. Downside is probably limited compared to similarly tiny software companies, but I have no idea what the upside is or when it might come — and it’s so small that any additional attention (as from Manny Backus or others, this is a pretty appealing “unknown” kind of idea for newsletter editors to pitch) can really move the stock pretty quickly (up or down).

If you’re invested in Aware or have looked at them, I’m sure we’d all be delighted to hear what you think — and it is, after all, your money… so let us know your AWRE thoughts, please, with a comment below.

P.S. Biotech, what biotech? Aware does have a medical imaging business, which essentially means they sell software that can be used to share medical imaging data — X-rays and such — but it’s a tiny business, they don’t talk about it much at all, and it seems like it’s probably not a very good business (since every medical imaging device maker and electronic records company doubtless also provides or sells similar software). And I guess you could stretch and say that there’s some biology-related stuff at Aware, since some biometric data is related to biological function, but it’s almost all just processing image data (fingerprints, facial recognition, iris scans). So no, there’s no real biotech “sizzle” at AWRE, perhaps that was a slip of the ad copywriter’s finger.