“The One Company Hell-bent on Stopping Cyber Crime” (Motley Fool)

Sniffing out the Gardner Brothers' Data security company

By Travis Johnson, Stock Gumshoe, March 10, 2010

Cyber security looks like it’s going to become a pretty enticing target for newsletter teasers — we all know about the risks of identity theft, online scams, and unauthorized access to your bank accounts and credit cards, and we also know, thanks to the highly publicized fight between Google and the Chinese government (among many others), that the “hacking war” reaches every corner of the globe … so of course, there must be some profit for the security companies who fight the hackers, right?

We were teased about one of these last fall, in an ad that I’ve seen repeated a number of times since — that one was more about military cyber-security, the ad came through teasing us about the “$50 Billion Shadow Syndicate,” and the stock is up quite a bit since that tease … though much of the movement could certainly have come from the newsletter’s pushing.

And now, we get a teaser from the Motley Fool, this time in a “free” report from the Stock Advisor newsletter — and no, it’s not the normal kind of “free” where you just get it and read it and your credit card remains safely in your pocket, it’s “free” as in “we just wouldn’t feel right about giving you this report if we weren’t sure you also got the big picture from us in the monthly newsletter, so you have to subscribe first at $99 a year.”

So that, of course, gets the Gumshoe on the hunt — let’s see if we can identify this stock without having to sign up for anything, shall we?

The clues are not particularly detailed here, I’m afraid, but that’s no reason for an intrepid gumshoe to give up. Here’s what we’re told to set the stage:

“The No. 1 Threat to Your Livelihood

“Everything that matters to you — your life savings, your credit, your kid’s college tuition — can be stolen in the blink of an eye.

“Ignoring this threat is a big mistake. Read on to discover the timely opportunity that protects your wealth and could hand you some truly incredible returns….

“These days you get mugged without ever setting eyes on the hoodlums who did it.

“Crooks rack up charges on your credit card, pilfer from your checking account, or rip off your Social Security number without you even knowing it.

“And they do it by barely lifting a finger… from behind a computer screen a thousand miles away.

“But just because these thieves aren’t as brash as John Dillinger doesn’t mean they aren’t dangerous…

“So who are these dirtbags?

“They’re a shady collection of hackers and grifters called “cyber thieves.” And they can strike anyone, anywhere….

“Last year, cyber thieves stole $260 million from honest, hardworking people like you and me.

“What’s even more shocking is these crooks get away with it!

“Over 95% of cyber thieves never do time. They just walk away with the money.

“It’s enough to make your blood boil!

“But I didn’t write you to fill you with rage…

“I want to tell you how to fill your pockets… full of money made from investing in the one high-tech company the world’s wealthiest banks pay top dollar to stop cyber thieves dead in their tracks.

“And that’s why this is such an incredible investment opportunity for you right now.”

Sounds good, right? One of the more successful ways to market a teaser pick like this is to start with a broad problem that everyone understands, and then quickly skip to the one little company that’s solving the problem. That makes it easy to gloss over the fact that there are also — as in almost any business — hundreds of other companies trying to solve this problem.

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Doesn’t mean that the Foolies haven’t picked a good one, of course — they often recommend stocks that I like, and some of their letters have had good long-term performance over the years. This tease is for the flagship Stock Advisor newsletter, which puts brothers Tom and Dave Gardner in competition, with each picking one stock per month. Stock Advisor has been above average, according to Hulbert, for the last one, three, and five year periods (meaning it’s beating most other newsletters handily over those time periods, coming in at least in the top 20 or 30 out of the 200 or so Hulbert-tracked letters, though it looks like the results are also beating the S&P for those periods).

That good performance hasn’t always been the case, of course, and interestingly enough the Fool no longer has a prominent chart on their website detailing the relative performance of their newsletters against the benchmarks — they had been one of the few publishers that was open about overall performance, its too bad to see that go by the wayside.

But there was a point, yes? Right, we’re trying to find out which stock it is that the Gardner boys (they don’t tell us which one) has picked for cyber-security.

Other than telling us that the world’s wealthiest banks are their clients, what else do we learn about this company?

“The company stopping cyber thieves dead in their tracks

“If you recall the story of the famous bank robber Jesse James, you’ll know he was brought to justice by the Pinkertons — an elite private security force hired by the victimized banks.

“Like the Pinkertons, modern banks hire this company to protect them from cyber thieves.

“Its impenetrable, digital barrier surrounds all electronic transactions coming in and out of banks — ensuring that cyber thieves never get the chance to steal your personal information.

“This is not a ‘set and forget’ operation.

“This company has teams of engineers working around the clock to make sure that its financial customers like HSBC, ING Bank, and Wachovia are secure.”

OK, so a bit more “color” on what the company does, and the names of a few clients. Any more?

“Led by a founder-CEO with a large stake in the business, this data security leader is rapidly entering new markets — diversifying beyond its banking customer base, adding 1,480 new customers last year! …

“More than doubling its profits over the past 5 years!

“And this is only the beginning…

“This company’s goal is nothing short of protecting the world from cyber thieves.

Fortune magazine ranks it among the fastest-growing companies in the world.

“And Busi