Daily Gains Letter

Cyber Defense Stocks a Boon for Investors in 2015?

By for Daily Gains Letter |

Cyber Security Investment OpportunityThe growth of the Internet has been one of the top advancements in history. But with this good news comes the darker side, namely cyber attacks that cost billions of dollars in damages along with non-monetary impacts. Millions of Americans have gotten their personal data stolen over the past few years, and it will likely only worsen. There’s also the threat of cyber attacks on key government and intellectual assets.

But with the threat also comes a potential investment opportunity in cyber defense.

President Obama just requested another $14.0 billion to improve the government’s safeguards. Could you imagine foreign threats hacking into our nuclear installations and military? The threat is real.

Think about what happened to Sony Corporation (NYSE/SNE), when its database was broken into, costing the company about $100 million. There were also the major breaches to The Home Depot, Inc. (NYSE/HD) and Target Corporation (NYSE/TGT). And just last week, the database at Anthem, Inc. (NYSE/ANTM), the country’s second-largest insurer, was hacked, impacting its 80 million clients.

Cyber Security Stocks a Boon to Investors in 2015?

Cyber security companies are attracting focus as an investment opportunity. The catalyst that will drive up the share price of these stocks will be security attacks that continue to plague companies and governments around the world and cause excessive monetary damage.

In the mid-cap area, an investment opportunity to look at is FireEye, Inc. (NASDAQ/FEYE), which was just hired by Anthem to help protect against further attacks. The company has a current share price of around $39.00.

FireEye has been a favorite on Wall Street following its debut in September 2013. The stock traded as high as $97.25 in March 2014, but it has since declined to its current levels, which may make it a good example of the kind of potential investment opportunity investors can look for in the cyber security area.

FEYE FireEye Nasdaq Chart

Chart courtesy of www.StockCharts.com

The company is a developer of advanced cyber security solutions, including firewalls, anti-virus software, and gateway protection for about 2,700 companies in more than 67 countries. Clients include more than 157 of the Fortune 500 companies along with governments.

If investors are searching for a more balanced attack in cyber security, they may consider taking a look at a stock like PureFunds ISE Cyber Security ETF (NYSEArca/HACK) as an aggressive investment opportunity.

HACK PureFunds ISE Cyber ETF AMEX Chart

Chart courtesy of www.StockCharts.com

This exchange-traded fund (ETF) holds about 30 cyber security stocks, so it provides the broad coverage that investors should look for in a new potential investment opportunity. The ETF holds 80% or more in stocks listed on the ISE Cyber Security Index.

The advantage of an ETF investment is that when you buy it, you’re buying a broad and global approach to cyber security, which makes it a good potential investment opportunity. For example, with this PureFunds ETF, you will find companies like FireEye, Infoblox Inc. (NASDAQ/BLOX), Cisco Systems, Inc. (NASDAQ/CSCO), Fortinet, Inc. (NASDAQ/FTNT), and Barracuda Networks, Inc. (NASDAQ/CUDA), to name some of the top holdings.

Please note that the above information should not be mistaken as buy recommendations for FireEye or PureFunds ETF. Rather, these two picks are simply used for illustrative purposes, to help investors see which kinds of investments to look for if they’re considering the cyber security sector.

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Tags: , , , , , , , , , , , , , , ,