Cyber attacks have dominated the headlines of late, thanks to another breach of Sony's system and President Obama's recent proposal on the matter. So is now the time to invest in cybersecurity?
Alex Hamilton of EarlyBird Capital said he sees growth in the space, thanks to the government's establishment of a cyber czar and Obama's proposed cybersecurity legislation.
That legislation calls for the Department of Homeland Security to work with other nations to make the Internet secure. It also will work with the industry to identify critical-infrastructure operators and to prioritize the most important cyber threats and vulnerabilities.
"The government is going to lead the way," Hamilton said. "They're going to drive the dollars, they're going to drive joint ventures, because at the end of the day it's a real national security problem."
While the defense budget is flat to down, Hamilton said this slice of the pie will grow double digits. He called it a nascent, fast-growing industry that is very fragmented.
So what's the trade?
Hamilton's top picks are CACI International , ManTech International, NCI , SAIC , and SRA International.
These are undervalued names, he noted, because they are misunderstood. He believes the valuations are compelling, and they have tremendous free cash flow.Page 1 of 5 | Next Page