Recently, power companies received a call from an anonymous person claiming to be from Microsoft, who offered step-by-step instructions to repair the damage caused by a software virus. The caller was never traced or identified, but the power companies weren't falling for it anyway. The caller instructed them to enable "specific features in their computers that actually would have created a trapdoor in their networks. That vulnerability would have allowed hackers to shut down a plant and thrown thousands of customers into the dark," according to CNBC.
In response, the government is considering the implementation of a bill of regulations or rules to create a baseline standard for the security systems for infrastructure companies.
The fear of some companies, though, is that it will allow the National Security Agency new freedoms to create a backdoor surveillance system by giving them access to private sector data. Leslie Harris, president of the Center for Democracy and Technology, said, "The question is whether this is a cybersecurity bill or an intelligence bill." Some businesses, including Facebook and Edison Electric Institute, support the bill because they believe that it leaves individual businesses to decide how best to protect themselves, which could involve the software security companies Kapitall reported on last month.
If the bill becomes law, companies could be eligible to receive cyberthreat information and intelligence from the government that would allow them to identify hackers and cyberterrorists by their electronic signatures and Internet addresses. With the information provided by the NSA, companies could theoretically block attacks or stop them before damage is done, while there is no requirement to report information about the attacks to the agency. The difficulty for the companies is to actually trust the government with their private information.
Business section: Investing ideas
If the government is willing to pass regulation to strengthen the security systems of the infrastructure of our country, it could mean that the IT security industry could be looking forward to a jump in revenue. Below is a list of security software and services companies that could be affected by the government's decision. Do you think these names will benefit from the increase in security?
List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
1. Check Point Software Technologies
3. Sourcefire: Provides intelligent cybersecurity solutions for information technology; environments of commercial enterprises, such as health care, financial services, manufacturing, energy, education, retail, and telecommunications; and federal, state, and international government organizations worldwide. The company has a market cap of $1.46 billion, and a most recent closing price at $47.16.
4. ManTech International: Provides technologies and solutions for national security programs in the United States and internationally. The company has a market cap of $1.16 billion, and a most recent closing price at $30.83.
6. VASCO Data Security International
7. IntraLinks Holdings
8. KEYW Holding: Provides mission-critical cybersecurity and cyber superiority solutions to defense, intelligence, and national security agencies in the United States. The company has a market cap of $229.64 million, and a most recent closing price at $8.79.
9. Wave Systems: Develops, produces, and markets products for hardware-based digital security. The company has a market cap of $121.03 million, and a most recent closing price at $1.38.
10. Network Engines: Provides application platforms and appliance solutions for original equipment manufacturers and independent software vendors worldwide. The company has a market cap of $59.14 million.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Danny Guttridge does not own any of the shares mentioned above. Data sourced from Finviz. The Motley Fool owns shares of ManTech International and Microsoft. Motley Fool newsletter services have recommended buying shares of Check Point Software Technologies, Microsoft, and Sourcefire, as well as creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy.
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