4 Stocks Set to Gain from Rising Security Needs

These companies build the tools that can help keep us safer.

The images, released days after the bombing at the Boston Marathon, seemed to depict young men who could be two of the many thousands of college students in the area. How much help could those pictures be in solving the crime? A great deal, it turned out, as the suspects were identified in a matter of hours. It's a sharp reminder that surveillance technology is dramatically improving — and that the companies that sell it and other "homeland security" products continue to have opportunities in a world where terror can strike at seemingly any time.

Many major defense contractors make security-related products, but those units play a relatively small role at companies that sell multibillion-dollar weapons systems to the Pentagon. To find stocks that could benefit from increased spending on security equipment, we looked at some smaller companies. These stocks, all with market values of $1 billion to $4 billion, look appealing for investors with a high degree of tolerance for risk, and a belief that long-term security needs will win out over recent cuts in government spending.

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David Milstead
Contributing Writer
David Milstead is a Denver-based freelancer who writes "Vox," a markets and investing column for The Globe and Mail, the national newspaper of Canada. Previously, he was finance editor of Denver's Rocky Mountain News until it closed in 2009.