BusinessHomeland security is big business
According to financial analysts the homeland security business is still growing nearly ten years after the 9/11 terrorist attacks; analysts project that the market for homeland security goods like body scanners, radiation detectors, and surveillance cameras will grow 12 percent each year until 2013; the market for x-ray and body scanners is set to grown steadily at 15 percent annually as airports begin replacing aging equipment and the market expands; analysts say that the primary driver for future growth will be in cargo screening at airports and seaports as only a small percentage of cargo is currently scanned
pAccording to financial analysts the homeland security business is still growing nearly ten years after the 9/11 terrorist attacks.
The private investment firm Morgan Keegan predicts that the market for homeland security goods like body scanners, radiation detectors, and surveillance cameras will grow 12 percent each year until 2013.
Tom Quillen, a senior equity analyst at Stephens Inc., explained that “Homeland security is reactive. The stocks are hedges against bad things happening.”
For instance following the attempted Christmas Day airplane bombing in 2009, the homeland security stock OSI Systems, a manufacturer of X-ray and metal detectors for baggage and passengers, jumped 30 percent in a month.
OSI’s stock jumped largely thanks to $20 billion in increased government spending on airport screening systems.
The market for x-ray and body scanners is set to grown steadily at 15 percent annually as airports begin replacing aging equipment and the market expands.
Ruttenbur said, “The scanners are ten plus years old now,” and “going through an upgrade cycle.”
But analysts say that the primary driver for future growth will be in cargo screening at airports and seaports as only a small percentage of cargo is currently scanned.
In addition, airport checkpoint security is a relatively small market valued at approximately $1 billion. There are currently 2,100 security checkpoints in the United States and 90 percent already use X-ray scanners
For investors seeking to cash in on the market, Quilen warns that there are no pure homeland security companies. Many manufacturers like OSI or Flir Systems produce products that are used across a variety of industries like healthcare and government contracts only account for a portion of their total revenues.
“You have to spread the net wide and separate reality from hype,” Quilen said.
