You will be well familiar with the fact that I am a regular visitor to airports. The biggest part of my job is to travel the globe in search for investments. A few decades back, the amount of flying I do would have placed me in the enviable position of being part of the jet-set. Nowadays, mention that you are a frequent flyer and people pity you.
The seemingly endless security procedures are what people tend to hate the most. Whatever one thinks about these checks, I can assure you of one thing: You ain't seen nothing yet.
Having just spent a rather rushed 48 hours in Abu Dhabi, here is my humble prediction of where airport security is heading next.
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Having your suitcases, hand luggage and even your shoes scanned before getting onto the plane is now standard procedure around the world. But step off the plane in Abu Dhabi's airport, and you'll be scanned again!
The largest emirate of the United Arab Emirates is routinely checking the contents of the bags that come into the country. Why trust another country's checks, when you can carry out your own? Once you are past passport control, you have to place your bags onto yet another X-ray machine.
Having relayed the story to another one of my globe-trotting friends, I received word that Uzbekistan already has the same procedure in place. And chances are, other countries have also started doing it, or are about to do it.
With the changed security situation in London, how long will it be before you'll have your luggage scanned when getting back into Heathrow, Luton, Stansted or one of the other UK airports? ThinkEuroStar Terminal and ferry harbours, too.
The discussion on whether these security measures work is one that we don't need to get into at this point. What I am interested in though, is how to make a buck out of these developments. After all, someone has to manufacture all these security devices.
I have not yet done specific research into the security business. What's more, we aren't allowed to make individual recommendations in Profit Hunter Files. Yet this security idea is one of those early-stage ideas that has certainly been added to our growing file of possible investments but not one that we're ready to launch right into yet. What you make of this information is entirely up to you.
So far I have just done some very quick scouting around to see what security-related stocks are out there. And it's not difficult to find some: there were loads of candidates for companies that could feasibly benefit from the seemingly inevitable increase in demand for security technology.
I dug up some of the world's leading security firms. They all are North American, simply because that's where the best technology is available and where currently the most money is poured into these products.
Check American Science and Engineering (ASEI), a specialist for scanning and screening. RAE Systems (RAE) develops sensors capable of detecting trace elements of radioactivity, chemicals and gases. Canada-based Allen-Vanguard (VRS.TSX) produces decontamination centres and protective suits. And last but certainly not least, First Advantage (FADV) provides background checks on individuals.
These firms operate in markets that have as much of a guarantee for continued growth as a company could possibly have. Terrorism seems bound to continue, and with each bomb going off there'll be more calls to tighten security measures.
Some of that already shows in the stock market valuation of these companies. But pull-backs as well as entirely new aspects, such as airport scanning upon arriving in a country, could still provide investment opportunities.
We only know one thing for sure about this subject and that is that security measures are certain to be heightened in this era of indiscriminate terrorism.
There will be companies that will make a great deal of money from this growing market as countries are forced to spend more to protect their people. But there will be companies that lose out as their technology is ignored in favour of another.
We dont have a clear idea yet of where wed put our money but it's definitely something we'll be keeping on our radar screen.
From Abu Dhabi,
Sven LorenFor the Profit Hunter File
PS: You can read about our four latest international Opportunities, in The Profit Hunter, here:
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