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Thursday, February 09, 2012

Cybersecurity Is The Way To Play Defense Spending Read more: http://stocks.investopedia.com/stock-a

A recent survey by McAfee showed that 43% of respondents identified disruption to critical infrastructure as the greatest single threat posed by cyber-attacks, and nearly 57% believe that a cyber space arms race is occurring.

However, despite the growing need for preventing these sorts of attacks, actual spending and preparedness in the area is nonexistent.  A recent survey by Bloomberg of network managers at 21 energy companies, found that these firms only spend an average of $45.8 million a year on IT security. ...  However, analysts estimate that to prevent 95% of all attacks, it would take an average annual budget of $344.6 million per company.


To put that into context, the U.S.‘s largest utility, Southern Company (NYSE:SO), only made around $277 million in profit last year.  Nationwide, the U.S. would need to spend a total of $46.6 billion to prevent 95% of all attacks.  Given how vital our infrastructure is to national security and under-funded nature of the sector, cybersecurity will undoubtedly get a larger share of the shrinking defense budget.

With cyber threats continuing to mount and the reliance on computer networks growing, adding an IT security component to a portfolio makes sense.  Both the PowerShares Aerospace & Defense (ARCA:PPA) and iShares Dow Jones US Aerospace (ARCA:ITA) follow some of the largest defense contractors and could be used as proxy for the defense sector.

Communications defense contractor Harris (NYSE:HRS) has been increasing its security offerings in the space and could be great way to play the need for secured data systems.

http://stocks.investopedia.com/stock-analysis/2012/Cybersecurity-Is-The-Way-To-Play-Defense-Spending-SO-ITA-PPA-PCP0209.aspx?partner=YahooSA#axzz1lzqFqWJl

Posted on 02/09
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