3 Great Cyber Security Stock Plays

By Karen Rogers - September 22, 2012 | Tickers: BAH, CACI, KEYW | 0 Comments

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In April, 2009, Chinese and Russian cyberspies hacked their way into the U.S. electrical grid and left a malware gift designed to shut the grid down.  In November, 2011, a hacker easily hacked the Siemens three character password, gaining access into a South Houston waste water treatment plant’s Siemens Simatic HMI (human machine interface) software.  And the Cyber Security Act of 2012, possibly the most important piece of legislation addressing U.S. cyber terrorism threats, was voted down by Congress last month.

At this moment, every electrical power grid, petroleum refining plant and natural gas pipeline, water treatment plant, and transportation carrier is responsible for their own cyber security.  It’s far too easy for cyber terrorist and spies to infiltrate and shut down the nation’s electrical grids and clean water supplies.

Fortunately, there are three excellent cyber security companies working with federal and state government agencies to thwart these ongoing threats.  With these agencies just now realizing how dangerous their situation is, these three companies are looking at increased demand, growth and revenue from new and existing government clients.

KEYW Holding (NASDAQ: KEYW) IPO’d at $10.00 on September 30, 2010, and the stock closed yesterday at $12.80.  The smallest of the companies featured here, KEYW has already secured contracts with the National Security Administration (NSA), Department of Defense (DOD), and federal and state law enforcement agencies. 

KEYW continues to increase their revenue on a quarterly basis.  The company attracts new clients by marketing cyber security solutions designed to identify and document network vulnerabilities then develops and implements appropriate software solutions.  KEYW is also involved with ongoing cyber research and prototype development to continually upgrade existing programs.

CACI International (NYSE: CACI) went public in 1968, and the stock price closed today at $55.68.  The company counts the U.S. Armed Forces, DOD, Missile Defense Agency (MDA), Washington Headquarters Service (WHA), along with civilian companies including IBM, Merck, Hertz, and JP Morgan, as clients.

CACI is working hard to break the $1 billion dollar quarterly revenue barrier. The company looks at cyber security holistically and develops a comprehensive security plan to integrated cyber security with each client’s existing programs. CACI’s cyber security plan uses cross-functional capabilities with embedded, secure techniques that provide detection, prevention, reaction, and upgrades their products in response to new cyber threats.

Booz Allen Hamilton (NYSE: BAH) has been in business since 1914, and the stock closed yesterday at $13.60.  The company provides cyber security products and services to the U.S. Armed Forces, DOD, Joint Command, intelligence agencies, civilian law enforcement agencies and state and homeland security agencies.

Booz Allen Hamilton is in the delightful habit of earning over one billion in revenue each quarter.  The company approaches cyber security through three phases: innovation, research and development; architecture and standards phase, wherein cyber security technology is fully integrated into the existing larger network to prevent any gaps and vulnerabilities; and cyber security systems that provide secure content management, intrusion detection, automated monitoring, encryption, and authentication tools.  The company continually provides clients with product upgrades to insure maximum cyber security.

The financial highlights for each company are listed in the chart below.

Cyber-attacks against U.S. infrastructures are increasing and KEYW, CACI and Booz Allen Hamilton are well-established companies ready to grow from this new demand.  Shareholders can take comfort knowing that their current and new profits will come from these companies working to keep U.S. infrastructure safe.

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