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Why Cyber Security Stocks Are in Season

In an age when terrorists grow more and more Web savvy, cyber security has become crucial to the national interest. That’s why Obama has called cyberspace a strategic asset and US Homeland Security is hiring 1,000 new specialists in that field over the next three years.

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Cramer recommended ArcSight as a play on this trend on July 10, when the stock traded at $16.22, and now it’s up 42% to $22.99. He still thinks ARST is worth buying.

The company makes a software platform that allows its clients to protect their information-technology systems, in addition to helping them comply with government regulations. The platform collects data from across client networks so they can rapidly identify, prioritize and respond to compliance violations or cyber security attacks. Whether regulation-happy Congressional Democrats create new rules or the Pentagon continues to spend more on Internet protections, ArcSight could come out on top.

ArcSight beat fiscal first-quarter expectations in early September, and the industry now is entering its seasonally strongest period. With the federal government’s fiscal yearend budget flush possibly boosting company sales and next quarter typically being a good one for software companies, ArcSight’s in a bit of a sweet spot.

The takeaway?

“This is a good period for owning the stock,” Cramer said.

The company has an analyst day on Tuesday, but Cramer wanted the inside scoop beforehand. So he invited CEO Tom Reilly onto the show. Watch the video for the full interview.

Call Cramer: 1-800-743-CNBC

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