In a recent interview with Brian Ruttenbur of Morgan Keegan & Co. Inc. he examined the Homeland Security Sector. Interest in the space has waned among investors but value investors are coming back, and the big defense names are extremely cheap.

“The defense companies are getting more and more into the security space because it’s a faster growing area. Core defense budgets are going to see a 2% to 4% increase per year over the next five years. But security budgets are expected to grow much faster. We see the big defense primes actually coming into the space and becoming the primes in homeland security and other areas.”

Cyber Security Buzz

“There is one big growth area within security in the federal government and that’s cyber security. Cyber security is a big buzz phrase because of the Obama Administration. The cyber security spending per year could be as high as threefold or fourfold higher than levels they are at now.”

Homeland security will continue to grow very strongly within the federal government, particularly cyber security, which could be three or four times higher than current levels.

Companies mentioned include: Northrop (NOC); General Dynamics (GD); Lockheed Martin (LMT); Cogent (COGT); FLIR Systems (FLIR); NICE Systems (NICE); L-3 Communications (LLL); Raytheon (RTN).

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This entry was posted on Wednesday, August 5th, 2009 at 9:15 am and is filed under Industrial & Services Stocks. You can follow any responses to this entry through the RSS 2.0 feed.