Investing In Cyber Security Companies and Products

By on May 21, 2018

News of widespread cyber security breaches on reputable companies and government databases may be bad news for most people, but it could be considered good news for cyber security companies and their investors.

The global market for cyber security solutions has become a common topic of discussion among investors in a variety of industries and public sector organisations for a number of reasons. First and foremost there is the indisputable rise of identity theft, wide sweeping cyber security attacks and data hacking which has accompanied the expansion of the internet. Now there is the increasing focus on commercial businesses and public organisations which access or store personal and consumer information. And with the huge growth in mobile device application, there is an even greater risk to companies seeking to turn a profit.

Cyber security attacks are costing Americans billions of dollars. Whether the threat is from loss or corruption of data, theft of finances, the disruption of operational services, unauthorized access to intellectual property or the disruption of infrastructure, cyber security threats are both a national security issue and concern for financial market participants. And with government cutbacks, internet users are increasingly looking to private companies, IT providers and software firms of every size in the growing cyber security market.

The stakes are high and the the cyber security players are quickly developing ever more sophisticated pass-protected firewalls,  encrypted networks and anti-virus software to chase available consumer and investor dollars. Learn more about this hot market sector before jumping in with hard earned investments.

How to Invest in Cyber Security

It is hard to know exactly where to invest your money. Which companies will come up with essential technologies in the right areas? Who can stimulate demand, keep up with market needs and maintain demand with regular, critical updates? When it comes to cyber security markets, there are 3 key areas of technology to watch: Protection, Detection, and Response:

  1. Protection – companies specialize in antivirus, anti-theft and authorization software or maintain confidentiality encryptions.
  2. Detection – companies specialize in monitoring your system and network connections for threats
  3. Response – this may include computer security incident response teams and forensic investigator firms which help other business contain threats, notify compromised parties, recover damaged files or funds, and to rout out cyber security violators

What to Look For in a Cyber Security Business

The tricky part about investing in an emerging market sector is determining how to capitalize on it. If you’re ready to start exploring companies seeking investment capital or public firms with good stock returns, then for these promising business traits.

  • Smaller, less diversified players which make cutting-edge cyber security tools for the federal government and other private market clients, may be a highly profitable choice.
  • Investors will also want to look for cyber security companies with strong revenue growth, solid product histories and good cash flow on the books.
  • Pay particular attention to market leaders in network security, which have proprietary technology, competitive products and a large existing install base that creates steady revenues.

If you are looking for specific picks on publicly traded companies in the cyber security business then just check the computer you’re on now. Symantec Corp. (NASDAQ:SYMC) owns Norton Antivirus. Intel (NASDAQ:INTC) owns Check Point Software Technologies. And there is always the big hitters – Cisco Systems (NASDAQ: CSCO), Google (NASDAQ: GOOG) and Apple (NASDAQ: AAPL) with their own cyber security patents, encryption and software.

There are also non-public traded companies in search of capital to expand their business or insurers offering important cyber security protections.  Which stock shares you purchase or companies you raise capital for is largely dependent on current prices and how much you intend to invest at the start. Do your research, speak with your trusted financial advisor and understand how daily stock changes could affect your bottom-line.

Before You Become a Cyber Security Investor

The cyber security market is in a renaissance period. Not only should this allow individuals and businesses to get ahead of threats with prevention and detection capabilities, but hopefully it will come with strong market positions and long-term growth. Whichever cyber security company you decide to go with is not as important and setting the ball in motion and getting your feet wet in a burgeoning market.

There are no guarantees in the risky world of hackers and cyber security companies are your best bet for financial and computer security in the future.

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