Russian Programmers Look to Control-Alt-Delete U.S. Energy

Cyberthreats have increased in recent years as hackers look to disrupt financial institutions, steal identities, and now control energy remotely, something that should worry the U.S.

Jul 7, 2014 at 4:36PM

There are fresh reports that Russian hackers are targeting Western oil and gas companies through a highly sophisticated cyber operation called "Energetic Bear." The latest cyberwars coming out of Russia's should prompt the North American Electric Reliability Corp. (NERC) and the Federal Energy Regulatory Commission (FERC) to strengthen and enforce security standards surrounding critical energy assets. This presents new momentum opportunities for investors. 


Companies I believe are carving out a really nice piece of the cybersecurity market vary from large behemoths like Northrop GrummanLockheed Martin and Booz Allen Hamilton to up and coming players such as White Hat Security, Blue Coat Systems, and FireEye (NASDAQ:FEYE), a virtual security technology stock still off 60% from its 52-week high despite bottoming out at $25.58 in May. According to information security company Mandiant, the energy industry trails only the aerospace/defense sector as the industry most likely to witness a cyber attack. This means resources need to be allocated toward energy cybersecurity to secure our power sources like never before. That also means that investing opportunities in the space should not be ignored.

With more and more spending on next-generation firewalls, it may not be so far-fetched to assume that despite increased competition in a hot sector, Palo Alto may look to further deepen its relationship with Gigamon to make a more formidable threat prevention player in physical and virtual IT worlds in order to compete with heavyweights like Cisco Systems (NASDAQ:CSCO) and leading defense players mentioned above.Another name to watch in the cybersecurity energy space is KEYW Holding (NASDAQ:KEYW). The company has already secured contracts with major government agencies such as the National Security Administration (NSA), the Department of Defense (DOD) and a slew of federal/state law enforcement agencies. I'm also intrigued by CACI International (NYSE:CACI), a company with a client list that reads like a who's who list of Corporate America and therefore brings credibility that many energy companies would like to build relationships on. Palo Alto Networks (NYSE:PANW) may attract attention from energy companies and investors alike because of the company's ability to analyze files on an offloaded cloud-based network. 

As more energy companies look to allocate more capital to securing IT networks from cyber attacks, I believe investors may be able to benefit from an increased amount of upcoming joint ventures and perhaps even from outright M&A of cybersecurity energy solutions. Therefore, the potential for cybersecurity technology to be integrated within the energy sector could be massive. 

One's thing is for sure, with Russian hackers apparently looking to cripple U.S. energy assets, companies in the cybersecurity space may be more vital to our nation's national defense than ever before. The U.S. can't remain a superpower if the lights aren't on, so cybersecuring your portfolio appears to be  a solid long-term investment strategy. 

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John Licata has no position in any stocks mentioned. The Motley Fool recommends Palo Alto Networks. The Motley Fool owns shares of Lockheed Martin and Northrop Grumman. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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