Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Cyber security stocks rally after WannaCry attack

Cyber security stocks rally after WannaCry attack

Shares in Sophos (SOPH) are topping the FTSE 250, as investors rush to buy cyber security stocks following the WannaCry attack that hit one in five NHS trusts on Friday and has infected 200,000 computers globally.

Sophos, which develops computer network and email security products, has issued protection for the WannaCry threat, and its shares are in demand, as one of the few beneficiaries of the attack.

While the stock has also receive a boost from a raised price target from analysts at Deutsche Bank, its rise is part of a broader rally for cyber security firms, as the WannaCry attack, based on malicious software stolen from the US National Security Agency, underlines the vulnerability of companies worldwide.

'The scale of this ransomware attack underscores the vulnerabilities of the global digital economy,' said Thomas Fitzgerald, associate fund manager at EdenTree Investment Management.

'The attacks raise significant questions about whether or not countries that are developing and stockpiling cyber weapons can do more to protect those tools from being stolen and turned against their own populations. The WannaCry attack is likely to be a catalyst for more of these types of cyber attacks from copycat criminal organisations.'

Another stock to gain a boost from the attacks is NCC (NCCG), a cyber security consulting firm whose shares have jumped 3.3% to 142.5p. In Finland, shares in digital security group F-Secure (FSC1V.HE) jumped 3.5% to a 16-year high.

For those bullish about the prospects of cyber security firms following the largest-ever attack, there's even an exchange-traded fund (ETF) that tracks these sorts of companies.

ETF Securities' ISE Cyber Security Go (ISPY) is up 1.5% today, and 45% over the last year, highlighting the buoyancy of the sector.

It's an area that has long been favoured by Walter Price, manager of the Allianz Technology (ATT) investment trust.

A number of stocks he holds in his portfolio also feature in ETF Securities' ETF. While Sophos features, the bulk of the rest of Price's cyber security exposure is to US firms, which tend to dominate this area. Stocks include:

  • Imperva (IMPV.O)
  • CyberArk (CTBR.O)
  • Splunk (SPLK.O)
  • Akamai (AKAM.O)
  • Proofpoint (PFPT.O)
  • Palo Alto (PANW.K)

'Cyber crime is a growing problem and I think the cloud basically increases the need for prevention of cyber crime,' said Price in a recent update to investors, in which he highlighted the strong performance of Proofpoint, up 50% over the last year and one of the trust's biggest holdings.

'Proofpoint... takes your email, or your social networking interactions and basically analyses them, makes sure there’s nothing bad and then sends it back to you in less than a second,' he said.

'So you basically ship all your problems off to them, they find the problems and ship back a clean email stream without phishing and without malicious time bombs in it.' 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Liontrust ESG head says sustainable investment doesn't mean low return

Liontrust ESG head says sustainable investment doesn't mean low return

Peter Michaelis talks about ethical investment growth and where he sees future opportunites.

Play Are platforms the biggest barrier to wealth manager ETF take-up?

Are platforms the biggest barrier to wealth manager ETF take-up?

Citywire hosted a roundtable discussion to find out how and if wealth managers are using ETFs in their clients' portfolios and the challenges they face trading through different platforms.

Play SVM's Veitch on what's next for banks

SVM's Veitch on what's next for banks

SVM fund manager Neil Veitch is finding value in what he describes as unstable financials and talks through his favourite small caps.

Read More
Your Business: Cover Star Club

Profile: how Raymond James Leeds has flourished

Profile: how Raymond James Leeds has flourished

Preparing for his interview with Wealth Manager, Rupert Forrest has done some research on Yorkshire

Wealth Manager on Twitter