One Billion Reasons Why This Company Is Good for Another 100% Profit

Keith Fitz-Gerald Aug 10, 2016
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Delta executives and the mainstream media are looking at Monday’s catastrophic systems failure as an equipment outage, which would be great if that’s all it truly turns out to be.

Only problem is… I don’t believe in coincidences.

Today’s airlines – like many critical systems we live with daily – depend on complicated, overlapping, and exceptionally large amounts of data so critical that even the smallest SNAFU has global implications.

That makes them susceptible to, well, everything.

There’s no doubt in my mind that two-bit cyber terrorists around the world are watching the situation very carefully – and learning from it. And that means, in turn, that preventing more Delta-like situations is a high priority.

One company I’m tracking stands to make billions by doing something unique.

I think the stock doubles as a result… again.

Ancient Data Systems Require Billions In “Life Support” Spending

I’m asked frequently if technology is really a “must-have” investment, and my answer is always the same… absolutely.

Think about this logically for a second.

We live in an era when practically everything we do involves data, from simply turning on your car to buying groceries.

Our government and tens of thousands of executives want you to believe this is a good thing because they use that data to discover new consumer behavior trends, improve productivity, and even perfect decision making. I have my doubts, which is why we’ll table whether this is a good thing or a bad thing for another time.

What I want you to understand is this… despite the fact that the data itself is very “modern,” many of the systems that produce it are terribly outdated and extremely proprietary.

Not too long ago, for example, I toured NASA privately and was stunned by the “green screen” technology on the Space Shuttle flight deck as it was being prepped for flight.

I was also flabbergasted to learn some ATMs are reportedly still running IBM’s OS/2 – a legacy operating system that debuted in 1987, while the Social Security Administration apparently uses benefits analysis programs dating to the 1980s.

The Secret Service uses a vintage mainframe computer from the same era that, according to PCworld a few years ago, only runs 60% of the time.

Our nuclear missile program runs on a 1970s IBM platform that requires eight-inch floppy disks that are downright modern when you compare them to the Treasury Department, which uses assembly language code from the 1950s, according to WIRED citing a GAO report.

Delta is just the tip of the iceberg, and getting home is the least of our problems.

Thankfully, the government understands this even if it doesn’t understand a lot of other things we talk about, which is why the 2017 budget request to deal with the digital mess I’ve just described is a staggering $89 billion.

And where’s all that money going to go?

Raytheon Co. (NYSE:RTN) is at the top of a very short list of qualified fixers.

If you’re following along as a member of the Money Map Report – and I hope you are – you’re already enjoying returns of at least 228% for having jumped in when I recommended it initially. If not, you’ve got a great chance to get on board today and line up another 100% winner.

Here’s why.

Most investors believe that it’s the smaller technology companies that are going to claim the lion’s share of new technology investment dollars needed to thwart cyber terrorism or simply keep legacy systems like Delta’s computers up and running. But, that’s not true.

It’s the big companies like Raytheon that will be the real winners because they are the only ones with the size, scope, and institutional memory needed to manage legacy systems brought to life decades before the employees who work on them were even born.

What’s more, those same big companies have the super-secret clearances needed to do the work that smaller contractors find increasingly impossible to obtain.

Raytheon has invested a jaw-dropping $3.5 billion in its cybersecurity business over the past eleven years that has, as of yet, gone almost totally unrecognized by the markets.

I don’t think that will be the case for long as investors recognize the potential this brings to the table on top of its other defense contracting offerings at a time when America’s enemies are growing more sophisticated by the day.

Just last week, for example, the company launched an NSA-certified next-generation Ethernet encryption system to protect network communications handling sensitive information, including and up to Top Secret/SC1 status. That gives Raytheon the ability to sell the very same KG-350 Ethernet encryption system to commercial, government, and military customers immediately – and bring hundreds of millions to the bottom line at the same time.

Just 60 days ago, DHS – the Department of Homeland Security – reaffirmed Raytheon’s $1 billion contract to safeguard dozens of Federal agencies’ data from cybercrime and keep many of the antiquated computer systems similar to those I’ve just told you about running. That’s good for profit margins, too.

What really excites me, though, is something that very few analysts have focused on yet: Raytheon is leading the charge in teaching computers to defend themselves.

And that’s your opening.

Current protocol involves a human identifying a problem, flagging it with a write up, and then sending a report to higher ups who may take months to fix it; if ever. But a computer capable of proactively identifying threats and healing itself could free up analysts to do what they do best… think ahead.

Raytheon’s cyber security division, Forcepoint, more than tripled net sales last year, bringing in $328 million compared to $104 million in 2014. That’s a surge that’s roughly in line with the speed in which the cybersecurity sector is growing, and confirmation that we’re on the right track once again.

Raytheon recently beat earnings estimates by 2.9% while increasing them 6.1% year-over-year at a time when lesser companies are struggling just to make ends meet.

At the same time, the company increased guidance from $6.93-$7.13 per share to $7.13-$7.33 per share, making it one of the very few solid growth choices you can tap into today…

…even without the cyber security potential I’ve just shared with you.

Now, where did I put my boarding pass?

Until next time,

Keith

12 Responses to One Billion Reasons Why This Company Is Good for Another 100% Profit

  1. Bryan Knepper says:

    What is the latest on EKSO? Did everyone but me see this share dilution coming?

    • Jessica Sheppard says:

      Hi Bryan, and thank you for taking the time to reach out to us. Keith is working on an update that addresses the Ekso Bionics situation as we speak, and we’ll be sending it out soon. Keep an eye on your inbox so you don’t miss it!

      Thanks for being a part of the Total Wealth family,

      Jessica Sheppard
      Associate Editor

  2. Jim Keller says:

    A couple of observations:
    The airline companies are a real mess. They were “created” by the Govt, , then encouraged to acquire each other by the regulators. This has resulted in the last few companies having IT departments that are part of four or five old companies. They are not qualified nor ready to take on the modernization that would eliminate this type of failure.
    You want to get real scared, visit the IRS or the FAA. Yikes.

  3. randy a says:

    With antiquated equipment in all these agencies one has to wonder where all of the 19 trillion in debt was spent!

    • Keith says:

      Very true, Randy.

      Perhaps this is why the Fed cannot get its act together…because it’s busy evaluating data from a half century ago. And, sadly, I’m only half kidding!

      Best regards and thanks for being part of the Total Wealth Family, Keith 🙂

  4. Antonio Sanchez says:

    What happened to Esko with the huge drop in price a couple of days ago? I am heavily invested and I’m not selling , yet…..

    • Jessica Sheppard says:

      Hi Antonio, and thanks for reaching out!

      Keith is monitoring the EKSO situation closely and appreciates all the insights! Keep an eye on your inbox for his upcoming alert — he’ll be sending it to you shortly.

      Best regards,

      Jessica Sheppard
      Associate Editor

  5. Barry says:

    BTW I already bought RTN thanks to u

  6. John yates says:

    Keith- I find your work extremely helpful. Do you have a recommended portfolio to work with– Thank you, John Yates

    • Jessica Sheppard says:

      John– thanks for reaching out, and we’re glad to hear you’re enjoying Total Wealth!

      Many of our readers who are looking to develop core investments and establish a solid portfolio structure start off with a subscription to Keith’s Money Map Report. Check it out here!

      If you’d like one of Keith’s more specialized publications (for still higher returns!) check out this link for more info.

      As always, don’t hesitate to contact our Customer Service department (1.888.384.8339) with questions you might have about any of our services, and thanks for being a part of the Total Wealth family!

      Jessica Sheppard
      Associate Editor

  7. Andy Rothauser says:

    Thanks for the suggestion on Raytheon. I’ve been in and out of the computer business since the 1950s (yes I am that old and still kicking) and am therefore acutely aware of the fact that some of these old dinosaurs that I worked on must be still operating somewhere because the cost of upgrading was always more than a commercial budget could easily absorb in a given year and in the case of government because our esteemed congressmen, being mostly a bunch of lawyers, have no conception of computer technology and can only understand simple concepts like the price of oil or the latest tax loophole. Considering the enormous initial cost to now upgrade the hardware and to analyze and rewrite all the software that has evolved piecemeal over the years in all-but-forgotten programming languages, its obvious that only a large and experienced company like Raytheon can handle the job. The only other candidate I can think of off the top of head would be IBM and they don’t seem to be doing all that well. I only wish I had picked up on your original recommendation on Raytheon.

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