Cybersecurity: The Main Players in the $6 Trillion Cybercrime Market
Safehaven.com News Commentary
LONDON, November 9, 2017 /PRNewswire/ --
The Equifax breach exposed the credit of nearly 150 million people, almost half of the entire U.S. population. In this day and age, it seems almost impossible to keep up with countless ways in which your personal security can be compromised online. In the news today: International Business Machines Corporation (NYSE: IBM), Raytheon Company (NYSE: RTN), Mimecast Limited (NASDAQ: MIME), CyberArk Software Ltd. (NASDAQ: CYBR), BlackBerry Limited (NYSE: BB)
But this is just the beginning. Cybercrime is becoming more sophisticated, more widespread, and affecting more people and businesses. The economic damage from cybercrime could exceed $6 trillion by 2021, making it a much larger illicit business than the entire worldwide illegal drug trade.
That figure - $6 trillion in economic damages from cybercrime - is an annual number. To put that in context, OPEC is expected to take in a little over $500 billion in oil export revenue in 2017. That means that cyber criminals will be destroying almost 12 times the value of OPEC's entire annual oil export revenue, a truly staggering figure. And that economic destruction will be taking place every single year.
If cybercrime is big business, then cybersecurity will need to become equally as big.
Businesses are set to spend more than $1 trillion on cybersecurity from 2017 to 2021, according to Cybersecurity Ventures. The market for cybersecurity is expected to expand by 12 to 15 percent each year through 2021.
That means there will be a ton of money in cybersecurity - it will be one of the few explosive growth stories of the next decade or so.
For investors, that opens up a lot of opportunity. Here are 5 companies that investors should keep an eye on:
#1 IBM (NYSE: IBM)
IBM has been a household name in the world of computing for decades, so it is no surprise that it is one of the top firms working in the cybersecurity space. IBM Security comes in second place on The Cybersecurity 500 list, the definitive list of the world's hottest cybersecurity companies. IBM Security, a division of the parent company IBM, offers an integrated system of real-time defense, analytics, and response.
IBM's platform can see threats in real-time, identify weak points, analyze suspicious files, isolate them and protect sensitive data. The security package can also identify suspicious activity, figure out if an employee's credentials have been compromised, and protect mobile devices - all crucial features in just about all modern day business.
IBM offers comprehensive solutions for large and small businesses, keeping the cost of IT security from getting out of control.
IBM's share have dipped since the spring, offering investors a good entry point. And with a dividend of $1.50 per share, or a yield of nearly 4 percent, one could do a lot worse than one of the most iconic names in computing.
#2 Hill Top Security / Big Wind Capital ( BWC; BGGWF).
A new age of cyberwarfare must be met with military-grade cybersecurity solutions. Hill Top Security is led by a handful of ex-military and intelligence experts, who still have deep ties to the military establishment. (Hill Top Security is currently in the process of merging with Big Wind Capital)
With an average of 4,000 cyber-attacks hitting businesses each and every day, cybersecurity needs to go beyond traditional approaches that are only reactive…and Hill Top takes the fight to the enemy.
Hill Top's management team has seen the threats up close, and have personal experience fighting back against the enemy combatants. The CEO is from West Point and a former Army officer. The Chief Technology Officer also came from West Point but has extensive experience on Wall Street. The COO is a Marine Corps vet and has years of experience in the intelligence community.
The executives at Hill Top were originally hired by the intelligence community to detect financial anomalies in various types of budgets. These are some of the top experts in intelligence, Wall Street and corporate America.
Hill Top offers an unmatchable, one-of-a-kind military-grade package that stops threats before they happen, uses artificial intelligence (AI) to adapt and continuously learn, and it is the only platform that allows for full and immediate operational recovery after a security breach. It also has Blockchain event validation for secure cryptographic validation.
Hill Top offers software and services that target three areas of business: off-the books auditing, for which the company has secured government contracts; cyber security for small and medium-sized businesses; and a highly secure crypto-currency platform for mining industry traders.
The flagship cyber asset for Hill Top is its Vauban DNA system, which was originally developed as a sophisticated logistics platform to track lost packages for UPS. They combined that with intelligence gathering, military-grade cybersecurity, and financial exchange semantics to create one of the most advanced security packages for businesses.
Hill Top originally got off the ground with government contracts, but it is now expanding, targeting small and medium sized businesses. With an estimated 27 million SMBs, the potential market for Hill Top is enormous.
Hill Top was recently acquired by Big Wind Capital (BWC; BGGWF), an acquisition that could seed the company with more resources and capital to scale up. Up until now, Hill Top has been unknown to investors outside of elite cybersecurity circles. But that is about to change.
#3 Raytheon (NYSE: RTN)
Raytheon is a government contractor that operates in several sectors, including missile defense, aerospace, radar, sensors and imaging, precision weapons - and of course, cybersecurity and electronic warfare.
Raytheon feasts on government contracts and consistently wins big deals with the Pentagon. As conventional warfare recedes, cyber warfare has become a growing segment for the U.S. Defense Department. The battlefield has increasingly shifted online, with tanks giving way to cyber experts behind computer screens. Raytheon offers a long list of solutions in this space: radar jamming to dismantle enemy air defenses, cyber hardening, force-on-force cyber games/exercises, as well as the more routine cyber security packages that seek to thwart malware, viruses, hacking, etc.
Raytheon's stock is up nearly 40 percent since the 2016 U.S. presidential election, on expectation of higher defense spending. It has consistently raised its dividend, and its share price has steadily climbed year after year. With cyber threats emerging as a top national security threat, investors can be sure that the Pentagon will be calling upon Raytheon to respond.
#4 Mimecast (NASDAQ: MIME)
Mimecast is a UK-based company that focuses on email and data security, guarding against spear-phishing, malware, data leaks, data loss and downtime. Earlier this year, Mimecast launched the Mimecast Email Security Risk Assessment (ESRA), an analysis report that measures the effectiveness of email security systems. The ESRA reviews a company's email security, assessing whether or not they are up to snuff.
The results thus far have been striking. As of February 2017, Mimecast reviewed more than 23,000 email users, encompassing more than 26 million emails. These emails had all passed through IT and email security at the firms that participated in the assessment. Yet, even as the emails didn't raise any alarm at their own companies, Mimecast detected 3.5 million pieces of spam, nearly 7,000 dangerous file types, and 421 unknown malware attachments. In other words, Mimecast is offering email security coverage that is hard to beat.
Mimecast says that if an organization has not reviewed and updated its email security system within the past 18 months, it is likely vulnerable to attack. Mimecast has a market cap of just $1.7 billion, and despite its small size - at least compared to IBM or Raytheon - it is ranked #5 on The Cybersecurity 500 list. Its share price has tripled since the summer of 2016, and it has gained 8 percent since the beginning of October alone.
#5 CyberArk (NASDAQ: CYBR)
CyberArk is an Israeli company that targets a specific type of cybersecurity: protecting privileged accounts, which it says is the largest security vulnerability an organization faces today. Privileged accounts are those with internal access to a company's computer system, and have authorization to do a lot more than a traditional employee.
If a hacker gets into a system, compromising a privileged account is the Trojan horse that can render the entire system defenseless. The attacker could gain full control of the company's IT infrastructure, disable security controls, steal sensitive data, and disrupt operations.
CyberArk is ranked #15 on The Cybersecurity 500 list, and it is a leading expert on the protection of privileged accounts. Its software package is modular, meaning companies can pick and choose product offerings independently, or combine them for comprehensive protection. The product list includes: privileged password protection, SSH key protection, privileged session control and monitoring, threat analytics, and more.
CyberArk's share price just jumped 11 percent on November 2, after reporting impressive quarterly figures, including an 18 percent increase in sales, year-on-year. Its stock has since retreated a bit, offering investors a better entry point.
Other companies to watch closely within the cyberspace:
Blackberry Ltd (NYSE: BB) This well-known cell-phone pioneer is engaged in the sale of smartphones and enterprise software and services. The Company's products and services include Enterprise Solutions and Services, Devices, BlackBerry Technology Solutions and Messaging.
Blackberry used to be a worldwide leader in phones, but Apple, Google and other Android manufacturers have rapidly acquired market share. Blackberry has since focused on software and is now developing systems for autonomous vehicles. Tech giants such as Apple and Google won't be able to repeat Blackbery's success in this sector that easily.
3D Signatures Inc) is a high-tech personalized company with an innovative new software platform which uses 3D analysis to target various diseases and help clinicians identify a diagnosis and optimize treatment plans. 3D Signatures' software is saving doctors time which will make a huge difference in the treatment of patients.
As one of the only honorable mentions not directly tied to the cybersecurity industry, it is worth noting that 3D Signatures uses advanced tech with its platform, and as the medical field becomes more digitalized, 3D Signatures is sure to leave its mark.
The company's broad scope and futuristic technology brings a promising opportunity to potential investors. 3D Signatures is at the forefront of a new revolution in medicine, and investors are sure to take notice.
Kinaxis Inc is a provider of cloud-based subscription software for supply chain operations. The Company offers RapidResponse as a collection of cloud-based configurable applications. The Company's RapidResponse product provides supply chain planning and analytics capabilities that create the foundation for managing multiple, interconnected supply chain management processes, including demand planning, supply planning, inventory management, order fulfillment and capacity planning.
Kinaxis is a growing company, but the company has already carved out a significant piece of the pie. As a leader in its field, Kinaxis is a force which investors are keeping an eye on.
Computer Modelling Group is a software technology company producing reservoir simulation software for oil and gas companies. Computer Modeling Group LTD. Is a tempting trade for investors as it brings together two essential industries - tech and resources- which are going anywhere any time soon. Especially as the need for security grows, a tech company involved in the oil and gas industry has an incredible opportunity to offer other services.
While Computer Modelling Group focuses on the resource industry, its technology is definitely breaking ground. Founded nearly 40 years ago by Khalid Aziz, a renowned simulation developer, the company has proven that it has staying power. As the resource industry meets technology, this will be a stock to pay attention to.
Kuuhubb Inc. is a company active in the development and acquisition of lifestyle and mobile video game applications. Its strategy is to create sustainable shareholder value through undervalued, but proven applications with robust long-term growth potential.
Thought it's focus is on mobile video games, Kuuhubb's tech makes it a likely target of acquisition and could be a key player in the mobile industry.
The company is headquartered in Helsinki, Finland and operates in both U.S. and Asian markets.
Kuuhubb Inc has seen its stock increase after a few recent acquisitions and currently trades at $1.60
By Joao Piexe
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This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include: that cybersecurity and information security industries will continue to grow as expected; that Hill Top Security Inc. ("Hill Top") will be acquired by Big Wind Capital Inc.; and that Hill Top could take real cyber security mainstream. Risks that could change or prevent these statements from coming to fruition include: that cybersecurity and information security industries will not grow as quickly as expected or that such industries will decline in size; that Hill Top will not be acquired by Big Wind Capital Inc.; and that Hill Top will not take real cyber security mainstream. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The forward-looking statements contained in this news release reflect the current expectations, assumptions and/or beliefs of the writer based on information currently available to the writer. In connection with the forward-looking statements contained in this news release, the writer has made assumptions about: expected growth in the cybersecurity and information security industries; that Hill Top will be acquired by Big Wind Capital Inc.; and that Hill Top will take cyber security mainstream. The writer has also assumed that no significant events will occur outside of Hill Top's normal course of business. Although the writer believes that the assumptions inherent in the forward-looking statements are reasonable, the forward-looking statements are not a guarantee of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. The forward-looking information contained herein is given as of the date hereof and the writer assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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