Ian Cooper has been a newsletter pundit for a long time, I’ve mostly noticed him covering options trades and tech, biotech and natural resources stocks… but this is the first big widely-circulated teaser pitch I’ve seen over his name in a while, and I don’t think I’ve written about him since 2010.

When last we looked at an Ian Cooper pitch his publisher was Angel Publishing, but this ad is for Triple Digit Returns, which has been through a few editors over the years and is published by Wealthpire/TradingTips (and will cost you $299 a year)… and to entice potential subscribers to bite the hook, Cooper is now dangling “The $15 Company Vital to the Future of Apple, Amazon and Samsung.”

So who is it? Let’s dig in and see what clues he drops for us.

First, a taste of the big picture spiel to whet your appetite…

“Google… Amazon… Apple… Samsung… IBM… Facebook… Tesla… Microsoft…

“They’re ALL battling to achieve THE tech breakthrough of the next decade… and they ALL need this small, overlooked company’s product to do it.

“Which makes it…

“The $15 Stock You Could Retire On!

“Those who take action now could position themselves for
gains of 12,000% or higher…”

The basic idea is not unfamiliar — he’s talking up the notion of investing in tech suppliers, stocks which can benefit from the rise of big-name companies or products and huge trends, but which might not be household names themselves. More from the ad…

“… you know that Google has made fortunes for many. But what you might now know is this…

“The TRUE rewards of Google’s success were actually reaped by folks with the foresight to invest in the companies that Google NEEDED in order to build their company.

“I’m talking about the small tech firms that make components necessary for you and me to use Google every day.

“Keyboards… monitors… speakers… hard drives… thumb drives… processors and more.

“These are the behind-the-scenes tech companies known as “enablers.”

“You no doubt know the names of many of the enablers that were crucial to Google.

“Intel… Logitech… HP… Dell…

“And if you had invested just $2,500 in each of these companies the day Google was officially incorporated…

“Just a year and a half later, that very reasonable $10,000 investment would’ve exploded into a $1,238,461 fortune.”

OK, so get that comparison out of your head. That’s an extraordinary period in stock market history that he’s talking about, the very craziest acceleration of the dot-com bubble. Yes, Intel and Logitech and Dell and pretty much every other tech stock boomed from the fall of 1998 to the peak in the Spring of 2000… Logitech was up over 500% to lead that particular group, but everything was hitting crazy prices — the Nasdaq 100 was up almost 300% during that time period.

That wasn’t because these companies were the “enablers” of Google and the internet or saw their sales or earnings soar, it was because investors got way too excited about the internet (And the Google comparison is just to get you excited — Google was not yet particularly important or well-known in 1998 — it had been founded and incorporated, and I remember talking about it with other information scientists in 1999 as an exciting improvement on AltaVista and the other leading search engines of the time, but it was still mostly “just another cool idea” in a world that was full of coolness… even their early investors weren’t predicting that they were going to take over the world in 1998 (that came later, especially after advertising entered the picture with the development of their AdSense program).

And no, I don’t know how Cooper turns those 300-500% gains into 12,000% gains — perhaps he’s talking about not just buying those perfectly timed bubble investments, but also being even more precise in your timing and buying well-timed call options on those perfectly timed bubble investments. Regardless, trying to mimic what happened in 1998-2000 to make your fortune is a tough row to hoe — kind of like trying to compound your “earnings” on scratch tickets by re-investing in more scratch tickets.

But anyway, I’ve gotten off track already on this Monday morning — just a little giddy about the fact that my favorite spot in Sarasota didn’t take as big a hit from Irma as was feared, perhaps, and relieved that the flashbacks to that horrific September 11 morning in DC back in 2001 are a little bit less raw this time around. I’ll try to re-focus for you.

Here’s what Cooper is promising:

“… another game-changing tech breakthrough is beginning to emerge that could hand you similar QUINTUPLE returns as the ones I just showed you.

“It’ll change the way you and I access information on the web forever.

“And it could launch one small stock just like the enabler companies I showed you – into the profits stratosphere!”

He’s talking about Artificial Intelligence (AI), which is certainly a trend that’s front and center for a lot of tech investors these days — there’s even a presentation on AI at the Delivering Alpha conference in NY that I’ll be attending tomorrow, which means that “AI Rising” is probably as much a Wall Street consensus as you’ll find these days.

And like many folks, Cooper goes big in talking up the promise of AI…

“… we’re on the verge of a technology shift that’s so disruptive it could equal the introduction of the smartphone, the Internet, and the home computer.

“Just a few years from now, artificial intelligence will play a role in practically every aspect of our daily lives.

“And the cutthroat competition by our largest tech companies to be the one to truly master AI and take it mainstream — is pushing one small company front and center as perhaps the next big ‘enabler….'”

What he’s talking about is the “personal digital assistant” (PDA) expression of AI… the growth in tools like Siri and Alexa and Cortana and Google’s Assistant. More from the ad:

“… this time it’s not going to be hard drive or keyboard makers that deliver the once-in-a-lifetime profits.

“My research indicates it’s going to be the company that delivers the “ears” of the smartest machines technology is capable of.

“I’m talking about tiny, embedded microphones. And…

“This Small Company Owns the Microphone Technology Essential to Taking Personal Digital
Assistants to the Next Level”

OK, so now we get down to business — Cooper has identified a trend in audio-based digital assistants, exaggerated the value of investing in a hot trend by comparing it to the dot com bubble, and has now found the key to most every teaser pitch we cover here at Stock Gumshoe, the “one tiny company” that he thinks will be the biggest beneficiary of that trend.

That’s a lovely line of logic, as long as you remember that comparing anything to past winners means you’re giving yourself a very specific kind of blindness called survivorship bias — there were, after all, plenty of tech companies and suppliers that failed during the rise of the personal computer (even if most of their stocks went up during the dot-com boom), but in looking back at the winners we don’t think about the fact that there were many losers… or that the selection of real long-term winners over losers was at least as difficult a future-predicting task in 1990 or 1995 or 1998 as it is today.

But anyway, we’re in the teaser-deteasing business here… so what is this microphone stock? Our other clues:

“You see, when you combine the input of a group of small microphones, a PDA device like the Amazon Echo is able to cut through background noise easier and ‘hear’ your voice commands much more clearly.

“And naturally… installing MORE microphones in each device means MORE profit for the companies supplying those mics.

“Including the company I want to tell you about today.

“For instance, the Amazon Echo uses seven of this company’s microphones in its array!”

Starting to get some deja vu about another recent teaser here, but let’s check to see if Cooper drops any other hints before I jump the gun…

“Microphone arrays are vital to the future of AI for the world’s tech giants….

“… this incredibly undervalued $15 company I’ve mentioned is the very best array producer for those giants to turn to.

“Simply put, their products are the gold standard of this niche industry — that’s why it already controls 59% of the mic array market share.”

So… yes, this is a stock that has recently also been teased by Jason Stutman at Angel Publishing (Cooper’s former publisher), and using an extremely similar teaser pitch — this is Knowles (KN).

Knowles is a MEMS microphone company, and they do indeed have a leading market share in these little microphone chips and arrays (as well as a historically substantial hearing aid business). Stutman pitched this as “Bezos’ Next Big Bet” and also hinted at is as the next great “enabler” company, with wording and arguments so similar that it makes me think that maybe Angel and Wealthpire hired the same copywriter for their ad pitches.

And what’s the story with Knowles? Well, I do actually also have a personal option position in this stock. I made my small speculation about a month ago, mostly because the stock had taken a hit on fears that Alexa was looking for alternate suppliers for the microphone arrays on its Echo devices and Apple would be delaying the delivery of new iPhones (Apple is a substantial customer, they’ve generally had a few Knowles microphones in each iPhone). Those concerns, along with the general concerns in the semiconductor/MEMS business that every product has competitors and pricing is brutal, make this stock pretty reasonably priced as a growth stock with a strong foothold in two growth trends (smartphones and PDA devices).

That doesn’t make it a “gimme,” of course — the competition fears are real, giant customers like Apple and Samsung and Amazon are very cognizant of their market clout, and they try pretty hard to make sure they don’t get too dependent on any one chip supplier for any of their core products… because having multiple suppliers means they can pressure their suppliers on prices.

But the “reasonable valuation” is real, too, Knowles is not expected to grow this year (2017 adjusted earnings estimates are for 95 cents per share, after 94 cents in 2016), but is expected by analysts to grow nearly 20% in both 2018 and 2019, mostly, we presume, because of the widely-anticipated growth in “always listening” microphone devices like Echo/Alexa and Siri. If they can really grow earnings at that rate, then paying a forward PE of 13 for the shares is eminently reasonable — that’s a little bit cheaper than some other often-touted Apple/Internet of Things suppliers like Skyworks (SWKS) or Broadcom (AVGO), who trade at 14-15X next year’s earnings and have substantially lower growth expectations.

There are reasons for Knowles to trade at a bit of a discount, to be fair — they have had a really weak few years, the stock has been cut in half since their peak in 2014, and they do have some net debt (though the balance sheet is fine, with also a decent cash cushion). The company has been a leader in audio chips and processors for a long time, their microphones have gone to both the moon and Mars with NASA missions, but for many years it was hidden as a little division inside Dover (DOV), the giant industrial conglomerate, so not a lot of folks know or trust the name or the story.

That doesn’t mean they’ll necessarily be a great performer, but it helps to explain why Wall Street is perhaps in “show me” mode when it comes to Knowles stock — the next couple of quarters will probably have a big impact on the shares as we see what volume is like for their MEMS microphones in the hot digital assistants this holiday season, and whether they’ve still got a few of their microphones in the iPhone when those first products are delivered.

My position is very small and speculative, but it is a profitable company (on an adjusted basis, at least) and it does have products that address some powerful and growing trends — not enough to guarantee success, with lots of MEMS microphone competitors out there (including from much larger companies, like ST Microelectronics and NXPI and Infineon), but I decided it was worth a flier.

When it comes to your money, though, it’s your call that counts — do you like the prospects for this microphone maker? See huge trends in their favor, or fear the competition? Let us know with a comment below.

And, of course, if you’ve ever tried out Cooper’s Triple Digit Returns, inquiring minds want to know whether a subscription is worthwhile — please click here to share your experience with your fellow investors.

Dislosure: I own 2018 call options on Knowles, and also own shares of Alphabet, Apple and Amazon, which are all mentioned above. I am not invested in any other companies mentioned above, and will not trade in any covered stocks for at least three days per Stock Gumshoe’s trading rules.