LONDON – TECHNOLOGY – What are the biggest challenges that the global economy faces over the next few decades? War? Terrorism? Climate change? Add to that list cybercrime. Cybercrime causes trillions of dollars of damage each year to the global economy. In the next 48-months cyber-crime is expected to rise to $6 trillion per year in economic damage, double the amount from 2015. In focus, today includes: Rapid7, Inc. (NASDAQ:RPD), Alphabet Inc. (NASDAQ:GOOG), PayPal Holdings, Inc. (NASDAQ:PYPL), Bank of America Corporation (NYSE:BAC), Microsoft Corporation (NASDAQ:MSFT)
To put that in context, the U.S. real estate industry is the largest segment of the U.S. economy, at $2.2 trillion in revenue. In other words, cybercriminals will be destroying three times more value than the revenue of the entire U.S. real estate industry. And they will do it every single year.
No wonder Ginni Rometty, IBM Corp.’s Chairman, President, and CEO, told an industry conference“cybercrime…is the greatest threat to every profession, every industry, every company in the world.”
Companies large and small have taken note – cybersecurity spending is expected to top $1 trillion over the next few years.…
But companies face a technological problem: the standard software packages sold as “security” are no longer sufficient for keeping billions of dollars of sensitive corporate information protected. Today’s cybercriminals are highly sophisticated and ruthless, necessitating a much more robust cyber defense.
We’re in the early stages of a cyber war promising to be one of the most expensive wars in history.
The average company today requires an impenetrable solution.
Only one cybersecurity company – public or private – has military-grade cyber security software and is headed up by a management team with experience in working in the intelligence community, Wall Street and corporate America.
The thing is, this small company is almost unheard of outside elite cyber-security circles. However, that is about to change.
Hill Top Security Inc. could be about to see its business take off. Hill Top has a military-grade, cybersecurity platform for small-to-medium-sized businesses (SMB), comprising blockchain event validation, cyber tagging, incident response and rapid restoration. It is currently in the process of being acquired by Big Wind Capital (BWC; BGGWF).
There are five reasons why investors need to pay close attention to Hill Top /Big Wind (BWC; BGGWF)
#1 The threats from cybersecurity are already massive, and are growing at a frightening rate
Everyone is becoming more familiar with cybercrime, especially as the frequency and severity of high-profile incidents have proliferated.
Recently, the WannaCry virus attacked Microsoft Windows operating systems in May 2017, a global attack that ensnared hundreds of thousands of computers around the world, demanding $90 million ransom in bitcoin.
And the costs can be more than money. The UK’s National Health Service became one of the most prominent victims of the global WannaCry ransomware attack, which forced the health system to shut down hospitals, divert ambulances and rendered patient records unavailable for a period of time.
The truth is we are seeing a bull market in cybercrime. There are an estimated 1.5 million cyber-attacks each year, or about an average of 4,000 every single day, 170 every hour, or almost three every minute. That means, by the time you finish reading this article, a handful of cyber-attacks will have occurred. The average cost of a cyber breach in the U.S. stood at about $7 million in 2016.
Cybercrime is also growing at a terrifying rate. According to the 2016 Global State of Information Security Survey, the number of detected incidents surged by 38 percent last year.
By 2021, the economic damage from cybercrime could reach $6 trillion. In other words, the cost of cybercrime will be bigger than the value of the entire global trade for major illegal drugs.
#2 The business world is waking up to that fact cybercrime is an existential threat to small companies
Companies now realize they have no choice but to budget for cybersecurity. About 60 percent of small and medium-sized businesses are forced to shut down within six months of a cyber-attack, according to the National Cyber Security Alliance.
As the cyber threat mushrooms, spending on defense is set to rise exponentially and will exceed $1 trillion from 2017 to 2021, according to Cybersecurity Ventures. The cybersecurity market will grow by12 to 15 percent each year through 2021.
#3 Hill Top has military-grade software
Because the threat is becoming more sophisticated, the solutions will need to become more complex as well. Most cybersecurity software is simplistic and reactive, meaning that cybersecurity vendors only update their software with solutions after an attack happens. They are band-aids, not cures.
Hill Top Security/Big Wind Capital (BWC; BGGWF) has an entirely different approach.
It is world’s first company sophisticated enough to meet the U.S. Department of Defense’s rigorous FIPS-FIAR standard for financial transactions. The software was originally developed for the intelligence community to detect financial anomalies but has been transformed into a platform called Vauban, a highly sophisticated cloud-based product that uses artificial intelligence and machine learning to constantly improve. It gives companies a chance to detect problems, risk score issues when they are found and block attacks before they occur.
Hill Top’s Vauban software is a unique, military-grade solution that has Blockchain event validation for secure cryptographic validation. Hill Top also has the only platform that provides full and immediate operational recovery after a security breach. The company’s cybersecurity package is probably in a class by itself.
#4 Management team has diverse and successful background
The Hill Top (BWC; BGGWF) management team is stocked with cyber-security and software development, experts who have worked throughout the Department of Defense, the Department of Treasury, Silicon Valley and Wall Street
They have pioneered software that meets DoD’s FIPS-FIAR standard for financial transactions. Hill Top’s CEO, Corby Marshall, is a West Point graduate and former U.S. Army officer.
The CTO is Neil Wright, also a West Point grad, who went to Wall Street and then to UPS as the company’s Chief Architect, where he developed software for package reconciliation and anomaly detection.
Tom Gilmore, the COO, is a veteran of the Marine Corps and has extensive experience working with the intelligence community. He also started and sold a small defense systems integrator that made the Inc. 500 list of fastest-growing private companies.
In short, the team is experienced and has a track record of success across multiple sectors, including the military, the intelligence community, Wall Street, Corporate America and even startup ventures.
#5 Hill Top has serious upside – small but growing quickly
Hill Top Security (BWC; BGGWF) already has government contracts in place for several million dollars. Because it is one of the only companies that have software compliant with DoD’s FIPS-FIAR standard, it hopes to be at the front of the line for future government contracts.
But the real money will be made in the private sector, where Hill Top is seeking clients among small and medium-sized enterprises that need to acquire more sophisticated cyber-security technology. The company has cash in the bank and, because the Vauban software is ready to go, there are fewer costs to scaling up.
That means Hill Top could have juicy margins for every customer it signs up, in the range of a staggering 80 percent.
More importantly, its upside is enormous. Hill Top is still small, and few investors know about it. The company expects its commercial revenue to eclipse the value of its government contracts in the next 12 months. There are over 27 million small and medium-sized businesses, meaning the market for this kind of cybersecurity could exceed $2.2 billion by 2020. If Hill Top captures only a small slice of that, it could be worth many multiples of its current valuation.
The Bottom Line
Cybercrime is one of the most challenging threats of our time…which means companies offering solutions have the potential to be among the most lucrative. With companies and governments set to spend trillions on cyber defense in the coming years, there is a lot of money to be made.
But Hill Top/Big Wind Capital (BWC; BGGWF) has a cybersecurity platform that outpaces its competitors. The software has artificial intelligence that allows it to constantly learn and stay ahead of the curve. It detects threats and prioritizes responses. And it allows for immediate recovery after an attack. The company is small, and the upside is enormous. Hill Top’s extensive military and intelligence DNA give it a leg up in the rapidly evolving cyber-security market. With government contracts in hand and a commercial line that is growing quickly, investors in the know will see a massive opportunity.
Other players to watch in the cybersecurity space:
Rapid7 Inc (NASDAQ: RPD) is a huge player in security and information technologies. The company’s special, analytics-driven approach to cybersecurity and IT operations give it an incredible advantage over its competitors. The company’s in-depth knowledge of the threats facing businesses’ physical, virtual, and cloud-based assets allow for high-quality service which puts Rapid7, Inc ahead in the field.
As the threat of cyber-attack becomes more and more apparent, investors are realizing the value of cybersecurity firms, making them some of the hottest stocks on the market.
Alphabet (NASDAQ: GOOG): With a market cap of over $657 billion, this is the second-largest by market capitalization in the S&P 500. We love Alphabet because its foundation is intellectual property-not tangible assets. Oh, and self-driving cars … definitely a huge part of the innovation in energy and artificial intelligence. As an early entry into the self-driving car world, Alphabet’s innovations have paved the way for a transportation revolution. Alphabet is set to continue to bring value to its investors and even as one of the largest companies in the S&P 500, Google’s parent company continues to reach new heights.
PayPal (NASDAQ:PYPL) is the leading innovator in online banking and electronic transactions, PayPal acquired a new product in 2014: Venmo, an electronic repayment software, which found massive appeal for people looking for an easy way to split bar-tabs, payback friends and move money easily back and forward between accounts.
An acquisition that came with PayPal’s $800 million purchase of Braintree in 2014, Venmo is a major part of PayPal’s new portfolio.
The company has some 184 million active users and 14.5 million merchants. In 2015 it generated $9.2 billion in revenue and its stock has been soaring for years. The price has ticked up 70 percent in 2017, leaving its old parent eBay in the dust and indicating that the company, which used to be a limited platform for online transactions, has moved into the next phase of its lifespan.
Bank of America Corp (NYSE:BAC) One of the biggest bankers in the U.S. is embracing the revolution in artificial intelligence. Along with ‘big data,’ AI will completely change the way markets are monitored, assets are managed and trades performed.
Embracing this new tech should set BOA above and beyond its competition, though Citigroup and other major bankers have shown little hesitation in getting into new tech themselves. The race is on to see which financial firm gets the most out of artificial intelligence, and which will be left in the dust.
Microsoft (NASDAQ: MSFT) is one of the most innovative and well-known companies within the tech sector, but its Windows platform is the most widely used operating system on the planet. First launched in 1985, Windows has shaped what is expected from a personal home computer.
But Microsoft is appealing to investors for more just its Windows platform. Like Intel, Microsoft is diving headfirst into an entirely new market. With key partnerships utilizing and implementing blockchain technology, the company’s upside could have huge potential as the tech takes off.
By. Meredith Taylor
