In the wake of the recent Google Docs phishing and WannaCry ransomware attacks, Microsoft’s president and chief legal officer Brad Smith took aim at the security and information practices of governments and other organizations, urging them to treat the instances as as “a wake-up call.”
A few weeks before the WannaCry attack, Symantec Corporation (SYMC), a key player in the cybersecurity space, released its Internet Security Threat Report detailing the sharp uptick in ransomware attacks in 2016. According to Symantec, the number of ransomware attacks increased by 36% from 2015 to 2016, while the average ransomware amount increased by 266%, from $294 to $1,077, over the same period. Similarly, e-mail phishing rates have increased from one in 965 in 2014 to one in 2,596 in 2016—a 169% increase over two years.
Perhaps as a reaction from this increase in volume and ongoing warnings from experts, investors appear to be betting that corporations and governments will step up investments in cybersecurity.
Network Security Software Jumps
From May 13 to May 18, network security software companies, as defined by FactSet’s Revere Business Industry Classification System (RBICS), experienced a 10.1% increase in price, up from a 4.3% increase over the same period last year.
When compared to the other 1,400 available RBICS subindustries across the universe of public companies, network security software falls in the ninety-seventh percentile of price increases over this same recent trading period.
The Shared Supply Chain of the Network Security Software Subindustry
A closer look reveals that the companies in this subindustry have specialized lines of business that may stand to benefit greatly if companies do, in fact, treat recent attacks as a wake-up call. Twelve of the 21 constituents of this subindustry earn 100% of their revenues from their network security software lines of business.
Additionally, strong supply chain relationships unite companies in this space. Symantec…