Cyber Security Heats Up, Let’s $HACK Into It

You would have to live under a rock if you have not seen the headlines on North Korea’s $HACK into Sony ($SNE),in an effort to stop the release of their new movie, “The Interpreter”. While the intrigue has been fun to watch this did bring an opportunity to light that could flow into an investment theme for 2015, should we be looking more closely at cyber security stocks.

I will start by looking at the sector ETF that tracks this, PureFunds ISE Cyber Security ETF ($HACK). This is a new ETF so the volume on the underlying is light but increasing, and the volume in the options is very small. But, I like to work backwards.

I like to see the top ten stocks that make up the ETF: Imperva ($IMPV), Fireeye ($FEYE), Splunk ($SPLK), and Juniper ($JNPR). These names make up about 35 percent of the ETF and may be names you have heard of. You can easily plug them into our Stock Focus list and get our rating. Check out the Seasonality chart and see where the stock is in its cycle as well as how correlated it is to that forecast.

I will spend some more time in the next few Corners breaking down some ideas that started from a $HACKing headline. See you next time at the Corner!