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Aware, Inc. Message Board

  • pantoe2 pantoe2 Feb 16, 2012 11:10 AM Flag

    AWRE in Whitney Tilson newsletter as a 130% gainer...

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    • This is a 13 page research report done by Privet Fund which filed a Sch13D with the SEC last week.

      In that filing they stated that it bought 4.1% of AWRE over the last year or so at an average PPS of $3.21.

      You have to register on Tilson site to get the report (Free).

      I've only gotten through page 4 so far but he lays out his case for the Biometric business being worth $1.89/share on a stand alone basis.

      • 1 Reply to elitecrete1
      • Biometrics business=$39,000,000 or $1.89/sh...

        Based on our analysis, we believe the biometrics business is on track for ~$13mm in 2011 revenue. While determining the margins on the biometrics business is not possible given Aware’s failure to report biometrics as an operating segment, the company’s overall blended gross margin for hardware and software sales is around 75% and management has repeatedly indicated biometrics is a highly profitable business relative to the DSL T&D business, thus suggesting gross margins over 90%.

        Given the lack of margin transparency and recent precedent transactions accruing from industry consolidation, valuing the biometrics business on a multiple of revenue is a reasonable approach. The detail on recent acquisitions follows:


        With a revenue multiple of 3.0x – significantly below both recent transaction comps – Aware’s biometrics business is worth $39mm on 2011 estimated revenue of $13mm.
        Information, opinions or recommendations contained herein are solely for informational purposes. The information used and statements made have been obtained from sources considered reliable but Privet Fund Management LLC neither guarantees nor represents its completeness or accuracy. Such information and the opinions expressed herein are subject to change without notice. As of the date hereof, Privet Fund Management LLC and its affiliates own securities of Aware, Inc. For further information, see Privet Fund Management LLC’s Schedule 13D filed with the SEC. Privet Fund Management LLC and its affiliates may either increase or decrease their positions in Aware, Inc. without notice. This document is not intended as an offering or a solicitation of an offer to buy or sell the securities mentioned or discussed.

    • Yes a compelling analysis providing good indication of the value of the parts of Aware. No arguement on value. The research applies very conservative assessment of each value driver. Also gives some view of potential upside for some of the components.

      I do have a problem with Aware's own ability to produce shareholder value by growing the business. They cannot, technology looks to be good but the products are obviously not blockbusters.

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