Fighting the 21st Century Battle. Investing in Cyber Protection

  • Cybersecurity stocks are in focus in light of the recent cyber attacks. The Cyber Security ETF (HACK) is up more than 30 percent in the last year.
  • The U.S. loses between $225-$600 billion annually in intellectual property just from the Chinese according to The National Counterintelligence & Security Center

The string of recent cyber attacks highlights America's cybersecurity vulnerabilities - and raises awareness of the cybersecurity companies that protect personal, private and government networks.  The Cyber Security ETF (HACK) is up more than 30 percent in the last year.  

Cybercrime is big business. The theft of government information, intellectual property, personal information, infrastructure disruption and more highlights the urgent need to reinforce current public and private digital security.  CyberSecurity Ventures estimates that cybercrime globally could cost $10.5 trillion dollars by 2025.

The United States is a large target for hackers.  

"We're losing between $225-$600 billion annually in intellectual property just from the Chinese," according to Michael Orlando National, Acting Director of The National Counterintelligence & Security Center.

The Halftime Report investment committee highlights how they're investing in this theme.  

"For an individual stock-picker who would like to invest in cybersecurity, Palo Alto is an ideal choice," says Jenny Harrington, the CEO of Gilman Hill Asset Management.  "This is an area where scale counts and Palo Alto is an industry leader that is rapidly consolidating in a fragmented market.  For ETF lovers there's always (HACK), but personally I'd rather focus my investment in the company that we believe is at the pinnacle of cybersecurity and offers significant profitability," she adds. 

Jason Snipe, the chief investment officer at Odyssey Capital Advisors agrees with Jenny Harrington. "This recent hack is concerning but unfortunately we will see more of the same in the future.  Palo Alto is one of the incumbents in the industry and I believe will play a meaningful role in this fight going forward."

Crowdstrike is another cybersecurity technology company that offers solutions in IT and cloud security.  Shares have more than doubled in the last year.  

"I'm a long-term investor in Crowdstrike," says Josh Brown, the CEO of Ritholtz Wealth Management.  "I think cyber security is going to be one of the biggest issues the world faces right alongside climate change and Crowdstrike has an opportunity to be the premiere name in the space."  

President Biden recently signed an executive order aimed at strengthening U.S. cybersecurity defenses.  Part of the order requires the Federal Government to partner with the private sector to foster a more secure cyberspace.

How does the U.S measure in defending itself against future cyberattacks?  

"I would grade our ability to fight it very high. I would grade our ability to defend against it very low," added Ian Bremmer, the President and Founder of the Eurasia Group.

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