3 stocks that will make the skies safer
After a failed terrorism attempt over Christmas, airport security will be a priority in the months ahead, and these 3 companies are likely to benefit.
In the wake of a failed scheme to blow up a Detroit-bound plane carrying 278 passengers over the Christmas holiday, Americans have been clamoring for answers. Politicians are wondering how this happened, security experts are trying to find a way to make the system work better and the public is wondering if it's really safe to take to the air.
There are a lot of questions being asked right now, but one thing is for certain -- this close call with disaster is certain to prompt action, and America is going to make airport security a new priority in the months ahead.
As the nation renews its commitment to safer air travel, the companies that have a track record of successful partnerships with the Transportation Security Administration (TSA) and the nation's airports are sure to see a boost in share prices over the coming weeks. Here are my three favorite picks in the airport security business.
American Science & Engineering (ASEI) is a leading security firm that has pioneered "backscatter" technology that provides 3-D images and X-ray scanning capabilities. The firm provides cargo screening equipment that could help detect potentially dangerous materials, as well as body scanners to screen individual passengers and crew. Needless to say, after the bombing attempt, the U.S. is going to place a high priority on detecting explosives before they ever get airborne. The company has recently been upgraded in Portfolio Grader, and is likely on the upswing.
Computer Sciences Corp. (CSC) is a key information technology provider to the government. In September, the Virginia-based firm was awarded a plush contract valued at approximately $493 million over five years. The deal puts CSC at the helm of all the computing and communications hardware, software and services used by the TSA. With all the attention on data sharing and the flow of information in the wake of the failed Detroit bombing, companies like CSC that already have a relationship with the TSA are sure to see continued growth and success.
OSI Systems (OSIS) sells specialized electronic systems for homeland security and defense applications. Specifically, its security division manufactures a variety of Rapiscan systems that inspect baggage and cargo for explosives, weapons and other prohibited materials. These products are also used in the verification of cargo manifests -- a fancy way to say that OSIS technology makes sure that planes are actually carrying the goods they claim to be. Though the attention is mainly on the individual suspect right now, surely broader questions will arise over the entire screening process -- giving OSIS the opportunity to prove how its wide array of Rapiscan products can protect air travelers from a variety of threats.
At the time of this writing, Louis Navellier owned shares of CSC in personal or client portfolios.
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3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
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