Reports of data breaches have become commonplace. Security experts in August 2014 reported that Russian cyberthieves stole 1.2 billion passwords across 420,000 websites.
Cybersecurity has become a high priority for companies, and it will be “for the foreseeable future,” says Richard Williams of investment-research company Summit Research Partners. Indeed, companies will spend $86 billion on information security by 2016, according to Gartner, which is a market-research company.
Williams likes FireEye (Nasdaq: FEYE; Price: $33.68) because of its rapid growth (revenue rose to $161.6 million in 2013 from $1.6 million in 2009) and prospects (revenue is projected to increase 162 percent in 2014). Zacks Investment Research gives FireEye a “strong buy” recommendation, but Williams cautions that the stock is volatile and best-suited for investors who have a high risk tolerance. For the less faint of heart, Symantec (Nasdaq: SYMC; Price: $24.59) is the way to go, he says. “It’s a major cybersecurity player, has a low [price-earnings ratio] and is well-regarded in the industry.”