NEW YORK (MarketWatch) — Cybersecurity stocks soared to fresh highs Friday after J.P. Morgan unveiled a new breach that could potentially affect some 76 million U.S. households.
Sector winners on Friday include Proofpoint, Inc. PFPT, +5.42% which closed up 5.4% to $39.49, Qualys Inc.QLYS, +3.24% which landed up 3.24% to $28.38, Palo Alo Networks Inc. PANW, +6.64% , up 6.52% to $104.70, and Imperva Inc. IMPV, +5.40% up 5.4% to $29.07.
Bigger tech companies with security subsidiaries also edged higher. Intel Inc. INTC, +1.52% which owns McAfee, increased 1.52% to $34.03, while Cisco CSCO, +1.00% which bought ThreatGRID in May, grew 1% to $25.31.
But as investors become more aware of these money-making opportunities in cybersecurity, major banks are appearing increasingly ill-equipped to fend off attacks.
“These new details should be a wake-up call for Wall Street,” said Adam Levin, chairman of Identity Theft 911 and Credit.com.
Both Levin and CyberSponse CEO Joe Loomis told MarketWatch Friday that financial institutions are not doing enough to protect customer accounts from hackers.
Loomis said he’s been in talks with J.P. Morgan Chase JPM, +2.48% for the last nine months trying to engage them to work with him on updating their cybersecurity. Oftentimes, he said, his calls are never returned, a signal to him that the company is not making cybersecurity a high enough priority.
“When your adversary is calculated in a military fashion and you’re running around with bows and arrows, you’re kind of kidding yourself,” Loomis said.
It has become a life-sized version of whack-a-mole, with banks playing catch up after a breach rather than acting aggressively to try and patch cracks ahead of time.
Of course, financial institutions have done a great deal to improve their security since bank hacks first hit the mainstream media in 2011, but they are still playing catch up.
“Sadly, this is our normal now, but the normal has always been manageable for the vigilant and the fast learners,” said Brian Kenyon, Intel Security’s chief technical strategist.
If Friday’s rising stock valuations are any indication, investors are hoping this breach is the one that finally nudges corporate c-suites to reevaluate how they protect critical data.
Palo Alto Networks was among the biggest movers on Friday after Piper Jaffray raised its price target to $120 from $110. In a note to clients, the brokerage said next-generation security vendors are capturing a larger share of incremental spend by the “near-daily flow of new breaches.”
Palo Alto Networks is now worth $7.8 billion by market cap.
Source:http://www.marketwatch.com/story/investors-devour-cybersecurity-stocks-2014-10-03
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