Ask Matt: Can I profit from hackers?

Q: Can I profit from digital security?

A: Security of our computers, tablets and phones is top of mind. That presents an opportunity for investors.

The raging debate over whether Apple (AAPL) should cooperate with the government in the investigation of a mass murder is opening a discussion of the balance of privacy and justice. Businesses and consumers are looking for ways to legally secure their data and are looking to companies with expertise needed to offer encryption, but also the ability to provide access when needed.

Investors have choice when it comes to security-company stocks - and analysts are pretty bullish on most of them. There are nine companies in the broad Russell 3000 index that are in the security software industry, according to data from S&P Global Market Intelligence. Nearly all the shares are down this year. But analysts think, on average, the nine software security stocks could be more than 40% higher in 18 months than they are now. Eight of the nine stocks, with the exception of Symantec (SYMC) are rated a “buy” or “outperform.” Analysts like AVG Technologies (AVG) best, and say the stock could be worth 63% more in 18 months. Analysts are also the most bullish on Vasco Data (VDSI), Imperva (IMPV) and FireEye (FEYE).

SECURITY SOFTWARE COMPANIES IN RUSSELL 3000

Company, symbol, implied upside to target*, rating

AVG Technologies, AVG, 63.1%, outperform

VASCO Data, VDSI, 62.8%, buy

Imperva, IMPV, 56.6%, buy

FireEye, FEYE, 49.2%, outperform

Rapid7, RPD, 42.4%, outperform

Fortinet, FTNT, 41.9%, outperform

Red Hat, RHT, 35.7%, outperform

Rovi, ROVI, 25.3%, outperform

Symantec, SYMC, 19.8%, hold

* 18-month price target

Source: S&P Global Market Intelligence, Paste BN research

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz