The Boston Marathon bombing has had a wide range of effects on the American psyche as a whole thus far, as we’ve discussed here and here, but one thing that’s also important to talk about is how investors should prepare their portfolios in its wake. There are plenty of financial repercussions in the works, from airline to travel stocks, but these are the areas of the economy that are most likely to be negatively affected by the bombing’s aftermath.
Is it possible to find a handful of equities that may actually appreciate in price because of the Boston Marathon bombing?
If Jim Cramer’s comments in early January 2010 bear any significance–and it’s important to realize that they do (many investors and traders alike follow his lead)–then we can begin to build a portfolio of none other than counterterrorism stocks. As 24/7 Wall Street puts it, “Cramer believes the real counter-terrorism stocks that are not the garbage speculative names” exist, and include the following:
American Science & Engineering, Inc. (NASDAQ:ASEI) “develops, manufactures, markets, and sells X-ray inspection and other detection products for homeland security, force protection and other critical defense applications. The Company manufactures X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers, and people,” according to Google Finance (via Reuters). The stock was down 0.65% yesterday, and -6.9% year-to-date, but Wall Street’s average price target rests at $63 a share. At the time of this writing, American Science & Engineering, Inc. (NASDAQ:ASEI) is trading at $60.69.
OSI Systems, Inc. (NASDAQ:OSIS) “is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications,” and judging by its Reuters profile here, it has a wide range of customers, as it “sells its products and provides related services in diversified markets, including homeland security, healthcare, defense and aerospace.” Shares of OSI Systems, Inc. (NASDAQ:OSIS) dropped 1.9% yesterday in a broader market selloff, and are down 10.7% year-to-date, but like American Science & Engineering, analysts’ average price target expects appreciation (of 38% no less).
FLIR Systems, Inc. (NASDAQ:FLIR) is another pick from Cramer circa 2010, and over the past year, shares are up 4.8%. More recently, they’ve gained more than 11% year-to-date. FLIR Systems, Inc. (NASDAQ:FLIR) specializes in “thermal imaging systems,” and its “advanced sensors and integrated sensor systems enable the gathering and analysis of critical information through a range of applications in commercial, industrial, and government markets worldwide.”
Cogent, Inc. was on Jim Cramer’s list, as its automated fingerprint identification systems give it a nice foothold in the counterterrorism stock market universe. The company was acquired by 3M Co (NYSE:MMM) on August 30, 2010, so logic holds that the purchaser, now, gives decent, yet diluted, exposure to this similar business. Here’s a look at some of its products.
Lastly, Nice Systems Ltd (ADR) (NASDAQ:NICE) was also on Cramer’s list, and it’s interesting to note that this company’s shares have been up a decent 4.1% year-to-date. Over the past month, they’ve been in the red, but with Nice Systems Ltd (ADR) (NASDAQ:NICE)’s focus on “solutions that enable enterprises and security organizations to extract insight from interactions, transactions and surveillance,” it may not be a bad idea to consider pairing it with 3M Co (NYSE:MMM) and the rest of the counterterrorism players listed here.
Our thoughts and prayers are with those affected by the Boston Marathon bombing.
For more coverage of Cramer’s recent picks, continue reading here.