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Introducing Big Brother’s Secret Weapon

The FBI just launched its new tracking system, which relies on facial recognition software.

By next year, the database is expected to house 51 million photographs.

It constitutes big news on two fronts…

First, there’s a chance that your photograph is in the FBI’s database.

Second, although Lockheed Martin (LMT) powers this soon-to-be ubiquitous technology, the real opportunity lies elsewhere… That is, in the company providing Lockheed with the secret algorithm.

Next Generation Identification: The FBI’s Shiny New Toy…

Conventional wisdom suggests that the FBI would rely solely on post-arrest mug shots and video feeds from security cameras to fill its national database.

As I see it, law-abiding citizens have earned an exemption from appearing on the list alongside criminals, right?

Well, the FBI doesn’t see it that way.

It’s taking a much more ambitious approach.

Along with mug shots and surveillance cams, the FBI will also upload the photos obtained from the background checks it conducts for private sector and government job candidates.

The FBI made assurances that the facial recognition system isn’t connected to the internet or social networks, or your local Department of Motor Vehicles… but I suspect it’s only a matter of time before such measures are fair game.

It’s all part of a comprehensive rollout of what’s being called the “Next Generation Identification” (NGI) system.

It’s a $1.2-billion project that uses state-of-the-art biometric technology to boost America’s national security and law enforcement capabilities.

Building on the Integrated Automated Fingerprint Identification System (IAFIS), NGI includes a host of new biometric identifiers – facial recognition, voice recognition, iris scans, palm print identification, photos, and even DNA profiles.

In short, it’ll be the world’s biggest biometric database – with the information easily available to both federal and state law enforcement bodies.

The database won’t just benefit the Feds, either, as police around the country will also have access.

If You Hate Big Brother…

Then NGI is your mortal enemy.

You see, with 30 million surveillance cameras in the United States, the system could tap into the cameras, using facial recognition to hold both criminals’ and non-criminals’ details. In fact, you probably won’t have a clue if your details are being captured for the system.

Needless to say, privacy advocates are concerned about the ability to randomly track and collect data on innocent folks. But the system will allow the FBI and police alike to identify people much easier and quicker – from serious crimes to routine traffic stops.

Indeed, during an arrest, the waiting time to identify the perpetrator will be slashed from two hours using the old system to a mere 10 minutes. And employers using it for background checks will no longer have to wait 24 hours… results will be available in just 15 minutes.

The Backdoor Route Into a Booming Industry…

Defense contractor, Lockheed Martin, designed the FBI’s NGI system in a deal worth upwards of a billion dollars. That being said, the company needed a lot of help getting the system off the ground.

The help largely came via MorphoTrak, a U.S.-based subsidiary of the French defense giant, Safran SA (SAF.PA).

MorphoTrak’s technology already powers biometric scans at 450 U.S. airports and DMVs in 42 states. And its biometric matching algorithms are ranked No. 1 by NIST (National Institute of Standards and Technology) for latent fingerprint matching accuracy.

The parent company, Safran, has its hand in everything – from building the landing gear, wheels, brakes, and ventilation systems for aircrafts… to manufacturing the propulsion systems for drones.

But I believe that its booming biometric security segment – which is increasingly relying on facial recognition technology – is big enough to push the stock higher.

Both Lockheed Martin and Boeing (BA) carry price-to-earnings ratios around 19. Safran’s is only 13, yet it’s making serious forays into an industry that I regard as having much more growth potential.

Since Safran trades on an intentional exchange, you won’t be able to execute the trade over the internet. But just give your broker a call and you shouldn’t have any problem entering a position.

Buy on the dips.

Onward and Upward,

Robert Williams
Founder, Wall Street Daily

Robert Williams