The only thing that seems to be growing as fast as the malicious actions in the Internet are the actions of companies who are trying to stop them.
Several companies, such as FireEye Inc. and Palo Alto Networks Inc., took off in 2015 and spread to more than 200 percent gain in an index that has existed for four years and monitors network security companies.
An exchange-traded fund (ETF) linked to the actions just passed $ 1 billion in market value, having doubled in size since the beginning of April.
Virtual invasions such as leakage of confidential records of US officials took place last week, urged cyber paranoia, which boosted network security spending and granted the status of darlings to companies that contribute to the protection of digital data .
The subject is starting to feed back among investors who are afraid to be left out.
“The more the price goes up, this sector will be more attractive to people,” said John Manley, who helps manage about US $ 233 billion as chief strategist of shares of Wells Fargo Funds Management in New York.
“In these actions have prevailed a herd mentality, as these companies offer a level of security that did not exist before.”
A gain of 25 percent in 2015 and a flood of investors inflows inflated the market value of the ISE PureFunds Cyber Security ETF to surpass the $ 1 billion threshold on Tuesday.
The figure compares with $ 107 million earlier this year and $ 494 million at the end of the first quarter. The fund rose 0.6 percent at 9.40 am in the morning, New York time.
Sales growth
Although the average number of shares in Cyber ISE index is trading at 24.6 times earnings estimates of analysts, only 18 of the 30 companies are profitable – however, it is projected that the number will rise to 25 over the next 12 months, data show compiled by Bloomberg. The multiple compares with 17.6 times the expected income for the S & amp;. P 500
Just over 3,000 data breach incidents occurred worldwide last year, which exposed 1.1 billion records, of which 97 percent were linked to attacks of hackers or fraud, wrote David Kostin, chief strategist at Goldman Sachs Group Inc. shares to the US, in a statement on 12 June.
Last week, a union of government employees said hackers stole data and social security numbers of all employees of the federal government.
The fervor surpassed the enthusiasm of investors by developers of drugs, a group of companies so popular that Janet Yellen, president of the Federal Reserve (Fed) said it twice a review last year.
The Nasdaq Biotechnology Index rose 20 percent in 2015 and was 5 percentage points behind cyber security.
General Growth
The ISE Cyber Security Index is rising not only because of a handful of companies. Twenty-seven of the 30 stocks in the index had gains this year and FireEye and CyberArk Software Ltd. were ahead with gains of more than 68 percent.
As cases of data breaches are piling up, large companies technology are analyzing smaller data security companies as potential acquisition targets, said the CEO of FireEye, Dave DeWalt, in a interview in May.
Several companies, such as Cisco Systems Inc. and Google Inc. are interested in one of the markets’ most popular and fastest growing “of information technology, he said.
The interest of equity investors that branch extended to the options market. Contracts to protect against a decline of 10 percent in the exchange-traded fund that tracks the ISE Cyber Security Index costing 27 points lower than bets on a gain of the same magnitude on June 4, according to data compiled by Bloomberg quarterly.
It was the lowest level of the relationship known as skew since entered the ETF trading in November, the data show.
“Investors are looking for an instrument” to enter the stock, Manley said. “This space is now attractive.”
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