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Recommendation: Buy KEYW Holding Corporation

Recommendation: Buy KEYW Holding Corporation. Green and Gold fund. Investment Thesis. 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.

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Recommendation: Buy KEYW Holding Corporation

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  1. Recommendation: Buy KEYW Holding Corporation Green and Gold fund

  2. Investment Thesis • 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).

  3. Investment Key Points • 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

  4. Overview of KEYW • 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)

  5. Management

  6. Growth of Cyber Security Attacks

  7. Increased Spending by U.S Government • 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.”

  8. Acquisitions • Since 2008 KEYW has acquired 14 companies. Most recently in (2012) (Poole and Associates) and Sensagewhich 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)

  9. KEYW Project G • 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 2nd 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.

  10. Revenue Growth

  11. EPS Growth

  12. Free Cash Flow (in millions)

  13. The KEYW Holding Corporation

  14. Current Price Chart

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

  16. SWOT Analysis

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

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