Share tip of the week: a punt on global cyber-security

This stock that is well-placed to benefit from the increased spending on cyber-security both in the US and across the pond, says Paul Hill.

Since the September 11th terrorist attacks in 2001, the US defence budget has doubled to roughly $694bn in 2010. This represents 45% of the global total and is more than 11 times larger than Britain's £37bn defence budget. It's no surprise then that investors are worried that the Pentagon is about to get clobbered in the forthcoming round of austerity measures. BAE Systems, the world's second-biggest defence organisation, is a case in point. Its shares have lagged the FTSE 100 by 20% since October. But this seems odd to me.

Ashton Carter, the Pentagon's procurement chief, points out that "the country is at war, and I think people will continue to support a large level of defence spending. And you know it is our intention to keep that where it is and actually grow it slightly, in real terms." And while BAE is exposed to any US and British spending cuts, remember that it is involved in some of the most cutting-edge areas in military technology where budgets are actually being hiked. These include cyber-warfare, for which BAE supplies aerial drones, spy planes and covert surveillance.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.