Cybersecurity Un-Safe Investments in 2015

Investment in cyber-security companies has been anything but safe in 2015.

In the US stock market, a five-year-old index tracking network security firms has slipped 15 percent in 2015, more than double the loss for the Standard & Poor’s 500 Index. Price declines and investor withdrawals have halved the value of an exchange-traded fund tied to the shares after swelling to a record $1.4 billion in July.

Companies from CyberArk Software Ltd. to FireEye Inc. surged in popularity last year following a spate of high-profile security issues, including the breaching of confidential government employee records. As market priorities shifted to economic concerns like weak crude oil prices and slowing growth, investors have lost their taste for one of last year’s most popular investments, according to Michael Ball of Weatherstone Capital Management Inc.

“Since there’s a shorter track record for the cyber- security firms, people have become more hesitant,” said Ball, president and lead portfolio manager of Colorado-based Weatherstone, which oversees more than $1 billion. “We’ve also seen a narrowing in market breadth across industries as investors have gotten more defensive. Not to mention there have been fewer high-profile cyber-security attacks lately.”

It’s not just a few companies dragging the ISE Cyber Security Index lower. Thirty-three out of the gauge’s 34 stocks have fallen this year, with FireEye and Barracuda Networks Inc. the biggest decliners, losing more than 32 percent. The gauge slid 0.3 percent at 4 p.m. in New York.

Breadth is nothing unusual for the index, whose companies have historically moved in tandem in both directions. From the start of 2015 through June 23, when the gauge surged 28 percent to a record high, all but seven companies climbed more than 3.4 percent.

“It’s a fledgling industry, so you’ll have higher volatility and less distinction between the companies,” said Ball. “Things will continue to be painted with a pretty broad brush.”

The ISE Cyber index’s sharp gains in the first half of 2015 resulted in stretched forward valuations for the gauge, and investors are now paring that back by selling, according to Ball. The median stock in the ISE Cyber index still trades at 20.2 times analyst earnings estimates, data compiled by Bloomberg show. The multiple compares with 16 times forecast income in the S&P 500.

“People are less willing to take the higher degree of risk associated with higher P/E ratios,” said Ball. “Especially right now, in the face of strong headwinds in the overall market.”

Information-Management: http://bit.ly/1UV5MkH

« Mapping Unknown Risk
Cyber Crime Forensics »

Infosecurity Europe
CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

Alvacomm

Alvacomm

Alvacomm offers holistic VIP cybersecurity services, providing comprehensive protection against cyber threats. Our solutions include risk assessment, threat detection, incident response.

BackupVault

BackupVault

BackupVault is a leading provider of automatic cloud backup and critical data protection against ransomware, insider attacks and hackers for businesses and organisations worldwide.

XYPRO Technology

XYPRO Technology

XYPRO is the market leader in HPE Non-Stop Security, Risk Management and Compliance.

Authentic8

Authentic8

Authentic8 transforms how organizations secure and control the use of the web with Silo, its patented cloud browser.

Infosecurity Europe, 3-5 June 2025, ExCel London

Infosecurity Europe, 3-5 June 2025, ExCel London

This year, Infosecurity Europe marks 30 years of bringing the global cybersecurity community together to further our joint mission of Building a Safer Cyber World.

Galaxkey

Galaxkey

Galaxkey is a data protection product that protects email, documents and any data using access control and an encryption platform.

AA Certification (AAC)

AA Certification (AAC)

AAC provide ISO Quality Management System certification services including ISO 27001.

Carson & SAINT

Carson & SAINT

Carson & SAINT is an award-winning consulting firm with deep experience in cybersecurity technology, software, and management consulting.

HoxHunt

HoxHunt

HoxHunt is an automated cyber training program that transforms the way your employees react and respond to the growing amount of phishing emails.

Secon Cyber Security

Secon Cyber Security

Secon Cyber Security is an Advanced Managed Security Services Provider with long standing experience of providing cyber security solutions to customers ranging from small to large enterprises.

Security BSides

Security BSides

Security BSides is the first grass roots, DIY, open security conference in the world!. BSides is a community-driven framework for building events for and by information security community members.

VirtualArmour

VirtualArmour

VirtualArmour is a managed security services provider with global reach and local attitude.

Computer Services Inc (CSI)

Computer Services Inc (CSI)

CSI is a leading fintech, regtech and cybersecurity solutions partner operating at the intersection of innovation and service.

Salem Cyber

Salem Cyber

Salem Cyber builds Artificial Intelligence (AI) solutions that work collaboratively with people to address scalability challenges in cybersecurity operations.

Cyber7

Cyber7

CYBER7 is a National Cyber Security Innovation community initiated by Israel National Cyber Directorate, Ministry of Economy and Israel Innovation Authority led by Tech7 – Venture Studio.

CampusGuard

CampusGuard

CampusGuard focuses on the cybersecurity and compliance needs of campus-based organizations including higher education, healthcare, and state and local government.

Kralos

Kralos

Kralos are an experienced team of Software and IT experts, specialized in the development of innovative cybersecurity solutions.

Hexagon

Hexagon

Hexagon is a global leader in digital reality solutions. We are putting data to work to boost efficiency, productivity, quality and safety.

Velaspan

Velaspan

Velaspan design, deploy, and manage enterprise wireless networks and cybersecurity solutions for leading businesses and brands.

Orca Fraud

Orca Fraud

Orca is an AI-driven fraud orchestration platform. We empower fraud fighters to outpace fraud using our custom ML models.

Redport Information Assurance

Redport Information Assurance

Redport Information Assurance is an information assurance and cyber security solutions provider offering integrated business solutions for all levels of government.