A Stock Worth Spying On (making a killing on helping the NSA phone tap)

[Robbien]

WASHINGTON, D.C. -

Surveillance of domestic telephone call records from millions of Americans may put a strain on the White House press staff and the confirmation of CIA director nominee Gen. Michael Hayden, but not on a fast-growth technology company that handles law-enforcement requests for customer calling.

. . .

Large international telecom companies, frequently the target of requests by the NSA, for customer data, need to rely on NeuStar for crucial information, such as identifying which local network a phone call originates from--a simple task made difficult by the de-regulation of phone service. Every time the company dips into its registry of phone numbers, it collects an estimated $1 fee.

However dicey for politicians, this line of business bodes well for NeuStar’s shareholders. Last Friday, the company reported a 46% increase in first-quarter net income equaling $18.3 million, while revenue surged 32% to $76.2 million. A pair of stock analysts revised their price targets upward for shares, which have already risen to $36 from $28 over the past eight weeks. With net margins of 21%, this niche is nothing to sneeze at, true. But at current levels, the trailing 12-month price-to-earnings multiple is at twice the overall market average, according to Morningstar.

Ganek tells Forbes.com that "none of the data we provide is relevant to NSA surveillance activities," but adds, "we do provide the directory of routing information that telecommunications service providers use, and we also help perform the administrative and operations processes required of them in response to subpoenas and court orders."

In other words, he stands to benefit from continued government snooping. A fact difficult to overlook--certainly not by those Wall Street analysts, who, on average, expect 25% annualized growth in earnings per share in the next few years.

http://www.forbes.com/home/businessinthebeltway/2006/05/11/spy-stock-neustar-cz_ms_0511neustar.html

[Rex]

1. By the corporations, for corporations...

bastards one and all.

[tanyev]

2. I wonder how many politicians ARE shareholders of NeuStar.

[Zynx]

3. Ahh...I like the way you think.

It would be interesting to see.