Anti-terrorism portfolio rises on British plot news

Posted by: Aaron Pressman on August 10, 2006

The so-called 9/11 portfolio, stocks of companies that provide security and defense products, got a giant boost today with news of a new terror plot broken up in Britain. Don’t be tempted. In the past, these terror event spikes have proven unreliable fuel for the stocks rise, so be forewarned.

Stocks up 5% to 10% or more today include:
American Science & Engineering (Symbol: ASEI), which makes x-ray inspection and screening gear.
SYNERGX Systems (SYNX), maker of fire alarm and security systems.
Digital Recorders (TBUS), provider of surveillance systems for law enforcement.
Flight Safety Technologies (FLT), which makes systems to protect aircraft.

Larger cap defense stocks are up only slightly and the PowerShares Aerospace & Defense (PPA) ETF is up just 0.7%. It’s dominated by big caps like Boeing (BA) and Lockheed Martin (LMT). Over the past year, the SPADE Defense Index underlying the fund is up just 2% and has not worked well as a proxy for playing the homeland security theme.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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