3 Security Stocks Worth Watching As Demand For Better Protection Grows

Rising reports of violent homejackings around Lake Geneva are testing Switzerland’s image as a safe harbour for wealth, and that shift is drawing fresh attention to security and surveillance technology providers. When reputations and high end assets feel exposed, demand for better protection often moves quickly. This article walks through three stocks tied to these security themes and explains how the recent news could matter for their long term story.

The stocks covered below are just a starting sample, and the full screen surfaced 7 more security and surveillance companies in Switzerland and France with equally compelling narratives that are not included in this article. To identify and analyze the highest conviction ideas in this space, go straight to the Security and Surveillance Technology Providers screener.

CS Communication & Systemes (ENXTPA:SX)

Overview: CS Communication & Systemes designs, integrates and operates mission critical security, surveillance and communication systems, ranging from counter drone and perimeter protection to maritime monitoring and crisis management. It also offers cybersecurity services, data intelligence and training solutions for clients in defense, aerospace, transport, energy, industry and financial services.

Market Cap: €282 million

CS Communication & Systemes operates at the intersection of rising security concerns and complex digital infrastructure, which puts it in focus after the Geneva homejacking reports. The company is expanding into surveillance projects and managed services, supported by recurring contracts and ongoing R&D in areas such as AI based analytics and unified security platforms. At the same time, it is loss making, carries leverage concerns and has relatively inexperienced management, which raises questions about execution if growth stalls. Analysts describe strong earnings momentum ahead and the stock is trading close to a DCF based fair value estimate. For investors who can tolerate these risks, CS Communication & Systemes provides focused exposure to mission critical security spending.

CS Communication & Systemes sits at the crossroads of rising security demand and real balance sheet questions. Get the full picture in the CS Communication & Systemes 2 key rewards and 1 important major warning sign

Build your own security and surveillance shortlist

CS Communication & Systemes and the two other stocks in this article all came from a single screener, but the real edge comes when you shape the filters yourself. Use our flexible Screener to mix valuation, growth, balance sheet and risk metrics to fit your approach, or lean on our curated Investing Ideas for ready made starting points.

dormakaba Holding (SWX:DOKA)

Overview: dormakaba Holding provides locks, access control and entrance systems that manage how people move through buildings, from mechanical keys and hotel door locks to electronic access, time and attendance, and secure doors for airports and hospitals.

Operations: dormakaba generates about CHF 2.4b of revenue from Access Solutions and CHF 471 million from Key & Wall Solutions and OEM, partially offset by CHF 56 million of eliminations between segments.

Market Cap: CHF 2.5b

dormakaba Holding sits in the middle of the current security debate, supplying the locks, access control and automatic doors that high end homes, banks and public buildings may turn to as concerns rise around physical threats in places like Geneva. Analysts point to double digit earnings growth and an order book of around CHF 550 million to CHF 600 million, while management is working on cost savings, product simplification and more software driven, cloud based access solutions. The stock trades well below some estimates of future cash flow value, which draws attention, but high debt and reliance on cyclical construction mean the story is not risk free. For investors willing to weigh that trade off, there is more to unpack in dormakaba’s security and earnings trajectory.

dormakaba’s earnings profile and security focus may not be fully reflected in its current market valuation. The key consideration is how the balance of potential opportunity and leverage risk appears within the 4 key rewards and 1 important warning sign

Exosens (ENXTPA:EXENS)

Overview: Exosens develops and sells electro optical technologies such as night vision systems, high sensitivity cameras, radiation detectors and imaging components that help customers see and measure what is normally invisible, serving defense, surveillance, life sciences, industrial and nuclear markets worldwide.

Operations: Exosens generates about €337.6 million from its Amplification segment and €165.6 million from Detection and Imaging, with small eliminations and unallocated items of €1.4 million.

Market Cap: €3.4b

Exosens sits in the path of rising demand for better surveillance and sensing, from Geneva style security concerns through to drones, border monitoring and modern defense systems. The company is expanding capacity for thermal and infrared cameras and has secured long term contracts such as the Czech Armed Forces order for image intensifier tubes, which supports visibility on future revenue. Some analysts highlight potential revenue and earnings growth and note that the stock screens as undervalued against certain fair value estimates, although the current P/E is high. Debt levels and margin pressure mean investors need to be comfortable with execution risk. For investors seeking pure play exposure to advanced imaging and defense sensing, Exosens may merit closer consideration.

Exosens blends long term imaging contracts with a high P/E that many investors may be only half watching. See how its growth story compares with its execution risk in the analysis report for Exosens

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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