NEW YORK (TheStreet) -- We're living in an age where everyone seems to rely on the worldwide Web. Entire companies and government infrastructures depend on the Internet for information, network support, web hosting and cloud software.Threats by one government against another government's computer systems and operational functioning are becoming almost a weekly event. Even military operations can be thwarted or shut down by hackers and cyber attacks. No wonder entities big or small have to spend vast sums of money to protect themselves from the kind of interruptions that can literally be a matter of life and death. We're seeing a Vesuvius-like eruption in the earnings and revenue of the tech stocks that get a significant portion of their cash flow from their cyber-security software programs. One such company is Akamai Technologies ( AKAM), which provides content delivery and cloud infrastructure services for accelerating and improving applications over the Internet in the United States and internationally. The company offers application and cloud performance solutions to enhance the operation of the applications used by enterprises to connect with their employees, suppliers, and customers. Its solutions include Web Application Accelerator, which enables enterprises to run various applications. Its IP (Internet Protocol) Application Accelerator is designed to optimize the performance, availability and real-time sensitivity associated with IP-enabled applications delivered over Internet-related protocols. From that description you can begin to tell that it also needs to be in the cyber security business. That's where the investor is introduced to AKAM's Web security solutions, which in Hawaiian-centric style is called "Kona Security Solutions". At its world-class Web site you'll find the following description:
Designed to provide superior cloud computing security, prevent data theft and downtime and mitigate Denial of Service attacks by extending the security perimeter outside the data center, Kona Security Solutions are part of an overall web security strategy. They deliver unmatched cloud security and offer protection from increasingly large and sophisticated Web attacks including SQL injection and Distributed Denial of Service attacks (DDoS attacks).When you see the extent of its data security solutions and realize that AKAM has a customer list that includes all branches of the U.S. military and every one of the top 30 global media companies, you have a good insight into why cyber security is a big part of the company's financial growth and its future.
My short-term expectation for the stock price of AKAM is a possible retest of the Sept. 26 intraday low of $37.52 before it begins an end-of-year rally that may exceed its current 52-week high of $40.32. My second cyber-security play to watch is Jim Cramer speculative favorite Radware ( RDWR)which has had a nice run higher since the August 10th low of $31.35. Based in Tel Aviv, RDWR develops, manufactures and markets integrated networking solutions worldwide. Its solutions include application delivery and network security solutions. Government agencies and multi-national organizations with network vulnerabilities learn how to protect their applications and guard against threats to their networks through the security applications RDWR offers them. You can visit its network security solutions page and see how the company answers clients' questions about the many options there are to cyber defense and protection. Radware's stock is trading at a relatively low forward PE ratio near 17, or 17 times forward earnings. Speaking of earnings, RDWR has been growing like gangbusters. In its last quarterly report, year-over-year quarterly earnings rose by more than 53%. The chart below helps us see that the stock price has correlated well with its earnings-per-share growth, which is nothing short of impressive. RDWR data by YCharts
The Israelis have an expertise in dealing with national security issues born from decades of personal experience and ongoing threats. It's no wonder that one of the better cyber-security companies would be headquartered there.