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Recommendation: Buy KEYW Holding Corporation Green and Gold fund.

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Presentation on theme: "Recommendation: Buy KEYW Holding Corporation Green and Gold fund."— Presentation transcript:

1 Recommendation: Buy KEYW Holding Corporation Green and Gold fund

2 KEYW Holding Corporation is in a position to capitalize on the growing market of cyber security Most of the revenue of KEYW comes from cyber security. Their competitors have only a fractional amount of total production in cyber security(Example SAI). Investment Thesis

3 High Growth of Cyber Security Attacks in the Commercial and Government Sectors Increased Spending on Cyber Security by the U.S. Government Acquisitions Project G Investment Key Points

4 Founded in 2008 Provides Cyber Security and Geospatial Intelligence Solutions to Government agencies ( Defense, Intelligence, and National Security) and Commercial Clients. In 2012, Revenue was split up into Services(71%) and Integrated Solutions(29%) The leadership is well experienced in cyber security (Leonard Moodispaw(CEO) has over 12 years experience in the cyber security arena. Over 70% of employees have high level security clearances Their employees have one many security awards including Security Global Excellence Award(2013) Overview of KEYW

5 Leonard Moodispaw President and CEO since inception Former President of Essex Corporation Former Vice President of Northrop Grumman Kim Dechello Chief Administrative officer since 2008 Former Chief Administrative officer of Essex Company Ed Jaehne Chief Strategy Officer Formerly in the Leadership of Essex and Northrop Grumman companies Mark Willard Chief Impact Officer Former Chief Financial Officer of Horne International John Crobath Chief Financial Officer since 2009 Former Director of Financial Operations of Kratos Defense & Security Solutions Inc Management

6 Growth of Cyber Security Attacks

7 KEYW currently has 492 million dollars in backlog projects with the U.S government According to Market Research Media “The Cyber security cumulative market is valued at $65.5 billion (2013 – 2018), the U.S. Federal Cybersecurity market will grow steadily – at about 6.2% CAGR(compound annual growth rate) over the next six years.” Increased Spending by U.S Government

8 Since 2008 KEYW has acquired 14 companies. Most recently in (2012) (Poole and Associates) and Sensage which were bought out for 160 million dollars Sensage is a security analytics and data warehousing company. It has helped KEYW in its Project G efforts in cyber security When they buy companies they do not buy them at auction Part of the growth of KEYW is in its acquisitions Some of the recent companies that KEYW has acquired are Rsignia(cyber security company), Poole and Associates (mission-centric provider of systems and software engineering services to the U.S. Intelligence Community) Acquisitions

9 Project G is a development of cyber security systems for the commercial sector. It offers 24 hour automatic protection against cyber attacks. The launch date is in the 2 nd quarter of 2013 They started testing the system in mid 2012 (AT&T is one of the companies that started testing the new system in July 2012)  The names of the companies that are on the system will be released towards the end of 2013.  The projected growth in revenue from Project G is 30% of projected total revenue in 2015. KEYW Project G

10 Revenue Growth

11 EPS Growth

12 Free Cash Flow (in millions)

13 The KEYW Holding Corporation 1y Target Est:17.71 Beta:1.58 Next Earnings Date:29-Apr-13 52wk Range:7.88 - 16.45 Avg Vol (3m):330,298 Market Cap:527.02M P/E (ttm):492.33 EPS (ttm):0.03 Div & Yield:N/A (N/A)

14 Current Price Chart

15 SAI produces revenue from four areas. ¼ of its revenue comes from cyber security. KEYW Comparison to SAI

16 Strengths  High level relationship with U.S government  Experienced Leadership  Agile in response to cyber security attacks  Small company, a lot of room for growth Opportunities  Growth in Cyber Security Attacks  Project G  New Acquisitions Weaknesses  Most of the revenue comes from government contracts Threats  Possible cuts in Government spending  Increased Competition by other Security companies SWOT Analysis

17 Sector: IT/Telecom Industry Group: Cyber Security Buy 300 shares of KEYW between 13.25 – 13.75, $3975 – $4125 0.7% of Total Portfolio Possible Strategies


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