Tags: Talpaz | cyber | security | threat

Stifel's Talpaz: Underinvestment in Cybersecurity Is 'Criminal'

By    |   Monday, 30 March 2015 07:20 AM

Given all the cyberattacks on corporations — ranging from Target to Sony — the field of cyber security creates plenty of investment opportunities, experts say.

"Cybersecurity is criminally underinvested in," Gur Talpaz, an analyst at Stifel Nicolaus, told CNBC. "Meanwhile, the threat environment is increasing. The threat plane has gotten so much bigger."

Many employees utilize mobile devices for work that are outside company networks, and many companies deploy outdated security programs. That makes corporations vulnerable, he noted.

As far as cybersecurity companies, "it's becoming a market of haves and have nots," Talpaz said, adding, "There's lots of opportunity for new players, so you want to pick your spots."

One of the stocks he likes is Palo Alto Networks, which makes next-generation firewalls. "The company sells a unique product . . . [and] has strong recurring revenues," he explained.

The House Intelligence Committee approved a bipartisan bill Thursday to make it easier for private companies to share cyber-threat information with the government, so that cyberattacks can be prevented.

The bill contains offers more stringent privacy protection than prior legislation, said Committee Chairman Devin Nunes, R-Calif., and Rep. Adam Schiff, D-Calif., who offered the bill.

"We're trying to do everything we can to protect civil liberties while protecting our cyber networks," Nunes said at a press briefing, according to USA Today.

The cybersecurity industry remains in a nascent phase.

"Some investors have compared it to a Y2K-like spending situation, but the difference here is that it's a Y2K that doesn't end," Daniel Ives, senior analyst at FBR Capital Markets, told CNBC. He was referring to the technology adjustments that had to be made prior to Jan. 1, 2000. "The enterprise and government are throwing billions after this."

Besides liking Palo Alto Networks, Ives also likes FireEye, Fortinet and Cyberark.

Meanwhile, Gemalto, a Dutch digital security company, calculates that more than 1,500 data breaches occurred worldwide last year, up 49 percent from 2013. A total of 1 billion data records were compromised in 2014, up 78 percent.

Identity theft accounted for 54 percent of the data breaches last year. "We're clearly seeing a shift in the tactics of cybercriminals, with long-term identity theft becoming more of a goal than the immediacy of stealing a credit card number," said Tsion Gonen, vice president of identity and data protection at Gemalto.

"As data breaches become more personal, we're starting to see that the universe of risk exposure for the average person is expanding."

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Given all the cyberattacks on corporations — ranging from Target to Sony — the field of cyber security creates plenty of investment opportunities, experts say.
Talpaz, cyber, security, threat
Monday, 30 March 2015 07:20 AM
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