Sourcefire Is Hot Thanks to Hacking -- The Disruptors
COLUMBIA, Md. (TheStreet) -- As a result of the recent cybersecurity attacks hassling companies like Sony (SNE), Lockheed Martin (LMT) and Sega, investor interest in security specialist Sourcefire (FIRE) has hit another high.
The security hardware and software maker, which was recently added to TheStreet's Breakout Stocks portfolio, is seen as one of the big beneficiaries of an increasingly volatile threat environment.
|The recent spate of cybersecurity scares is fuelling investor interest in Sourcefire.|
The company's shares climbed $1.11, or 4.16%, to $27.78 on Tuesday, far outpacing the Nasdaq, which gained 1.76%, and network security rival Cisco (CSCO), which rose 1.75%.
"We continue to view Sourcefire as an attractive growth play in the security sector, an area that is experiencing increased investor interest," said Todd Weller, an analyst at Stifel Nicolaus, in a recent note. "We attribute [this] to the many recent high profile security attacks that have hit various companies."Weakness in federal government sales, however, weighed on Sourcefire's most recent quarterly results, although Weller believes that the company is getting back on track. "While Fed government headwinds have dampened the near-term growth outlook, we look for these headwinds to dissipate over the next several quarters," explained Weller, reiterating his Sourcefire buy rating. "We [also] expect the company's commercial business to exhibit continued strength." "Expectations for Sourcefire's growth are set at reasonable levels," added Bryan Ashenberg, research analyst at TheStreet, in a note. "We think the stock will begin to demonstrate strong operating leverage as its federal business revives and it introduces new products in late 2011." Other tech companies are also aware of Sourcefire's appeal. The Maryland-based firm has already been an acquisition target for Barracuda Networks and Israeli company Check Point (CHKP), with the latter running into intense political opposition. Sourcefire's Snort intrusion detection technology is widely used in the U.S. intelligence community, prompting Washington lawmakers to cite national security concerns about a possible Sourcefire sale. Sourcefire nonetheless continues to be touted as attractive acquisition bait, particularly at a time when tech giants such as HP (HPQ) are opening their wallets for security M&A. --Written by James Rogers in New York.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV