Headlines like the one to the right by the AP are becoming all too common as hardly a day goes by where a major website isn't hacked, credit card data isn't breached, or an email with sensitive data doesn't end up in the wrong hands. It is also because of headlines like these that Intel (INTC) announced last month that it would acquire McAfee (MFE) for nearly $8 billion in cash. INTC's purchase and the constant headlines regarding security breaches have certainly been a boon to the stocks of companies in this field. At the same time that investors are looking for ways to play this trend, the number of publicly traded companies is relatively small.
In the list below, we screened for US listed companies that gain a large percentage of their revenues in dealing with internet security solutions. We then filtered the list by only including stocks with average daily volumes of more than 250K shares. As shown, of the 12 companies that made the list, only two have underperformed the S&P 500 year to date, and collectively they are outperforming the S&P 500 by a wide margin (19.57% vs 2.41%).
click to enlarge