With Increasing and Evolving Global Threats, Now Is the Time to Invest in Security Technology Stocks
At the start of this year, 160 Chief Information Officers (CIOs) and other top-ranking IT executives were asked by the leading news source for technology and IT providers, CRN, to name their priorities for investment. While wireless LAN, unlimited storage and mobile landed in the top ten, the number one choice of 80% of the participants surveyed was security.
The means and the methodologies to protect their organizations and their business interests from threats will top the list of their primary purchases in 2017. Threats of greatest concern are all inclusive and cover any act of hostility imaginable: from cyberwarfare, employee espionage, terrorism, indiscriminate acts of violence, kidnapping and ransom, to blackmail and theft.
Security technology stocks, such as Kratos® Defense & Security Solutions (NASDAQ:KTOS) and Lockheed Martin (NYSE:LMT), are on the leading edge of a new and perhaps more sustainable surge as innovative devices and services are being devised to respond to threats that have become more unpredictable. Kratos, for example, specializes in target drones that train pilots and test weapons. Lockheed Martin is one of the largest companies in the aerospace, defense, security and technologies industry.
These and other security tech stocks are poised to play an important role in this current climate of threats, hacks, cyberattacks, terrorism and violence and the subsequent increase in defense research, development and spending.
The Yahoo! hack that affected one billion user accounts, leaving them exposed and vulnerable, as well as the intrusion by a hacker who gained access to Mark Zuckerberg’s personal Facebook page, are an example of the same kind of cyberattacks that can easily disrupt the private and business sectors of the future.
If today’s leading technology companies are not safe, then conglomerates, small businesses and enterprises of every scale and industry are easy prey. As a result, security technology stocks are suddenly becoming more attractive, feasible and inevitable choices for investment.
International airports are increasing their budget allocation for services and devices that will protect their passengers and their employees. According to a 2016 survey run by SITA, the world’s leading specialist in air transport communications and technology, 50% of executives from 225 of the world’s principal airports made a firm commitment to beef up security through IT technology, compared to only 37% in 2015. Passenger processing and clearance would be the first sector in operations to get the needed support. Wearables, biometrics and even robotics would increase the accuracy of identification, secure the well-being of bona fide passengers and ferret out illegitimate parties with ill intent.
The cutting-edge radar device manufactured and distributed by Patriot One Technologies Inc. (OTCMKTS: PTOTF), (TSX.V: PAT), (FRA: 0PL), a weapons detection security company, has been gaining traction from investors and business executives since its launch at the International Association of Chiefs of Police (IACP) Conference in San Diego, California, in late 2016. Presentations for its revolutionary NForce CMR1000 delivered during investor conferences by Patriot One representatives in January of 2016 confirmed the need for a security device that can detect concealed weapons.
What makes the NForce CMR1000 unique is its capability to hone in on carefully hidden guns, explosives and other weapons with far greater precision than standard metal detectors used in buildings. The main advantage is that the device is effective whether its targets are walking or running.
Another solution is what is believed to be the next generation in facial recognition technology. It is the least intrusive and can be applied with the same kind of precision at long distances. A Nasdaq article written by Karen Canella of StreetAuthority reported that the Department of Homeland Security invested more than $5.1 million in a Biometric Optical Surveillance System (BOSS), which is a facial recognition technology that matches 3-D signatures of captured images and compares them with an existing BOSS database.
The advantage to using this image-matching technology is that it is effective at much greater distances on unsuspecting subjects without invading privacy. The FBI spent almost double that amount for an identification program that enables authorities to access a database of 12 million facial photos of individuals with some kind of criminal record.
The American public supports security technology in a big way. According to the same Nasdaq report, this time citing a CNN/Time poll, 79% of the American people welcome the use of facial recognition technology in public places. Another 81% do not object to the deployment of surveillance in streets and other areas frequented by crowds. This enthusiasm encourages investors, who feel confident in investing in a sector that supports public safety.
Cybersecurity is probably the most visible and prominent security field that has attracted the public’s attention and caused their alarm. U.S. News reports that the stakes have grown higher with the inevitable encroachment of the Internet of Things (IoT) into both homes and enterprises. Remote employees with their mobile phones and self-driving cars with inadequate security software offer an open invitation to hackers who want to infiltrate their organizations. Wired kitchen appliances, wearables and Wi-Fi networks also can be easily breached.
The immensity and immediacy of cyber invasion have made security professionals more active than passive, says U.S.News. Endpoint security is drawing in a lot of investors because of its promise to find and neutralize hostile parties who are in the periphery of the user’s cyber or actual location. It will launch preemptive attacks, instead of just creating walls to keep them out. It has a lot to offer.
The innovations and advancements discussed here scratch only the surface of what lies ahead. Security professionals and their competition will be in a race to win this ongoing war with new and more sophisticated products. In the meantime, security technology stocks will likely see their value increase, making their shareholders victors in the process.
