Cyber security issues are front and centre of discussion recently. The sector is outperforming the market year to date. Security has become a top priority for corporations and there is an expected rise in allocation to security spending to combat potential threats. There is rising concerns for possible interference in the upcoming elections and this also contributes to the bullish outlook on the cyber security sector.
Here are some publicly traded companies that are in the space:
💻 Cyber Security
Leonovus Inc (LTV-X)
A data storage company that specializes in block chain technology. They are working on a new token that can be a great opportunity.
Absolute Software Corp. (ABT-T)
A Canadian company that specializes in endpoint security and data risk management solutions. They have steady cash flow in a niche market.
(A Top Pick Oct 18/19, Up 4%) Investors are appreciating the steady cash flow. Some day they will be an acquisition target. They have a great niche in the market. They have the ability to grow, although it is not a giant market.
CGI Group (A) (GIB.A-T)
A global information technology consulting company out of Montreal. The charts are showing higher highs and lows. Their seasonality is Q4.
A consulting and outsourcing business. It does not have the same scalability as a software company as its success is based on the number of workers it has. Longer term, this business has a tremendous footprint for its global markets. It plays well into cyber-security concerns. It is valued at 17 times earnings and has…
The company is consolidating and growing slowly at 5 – 10% earnings growth. They are currently transitioning from hardware to software focused on security solutions.
An outlier among tech stocks, in a downtrend while tech is rising. Company transition has not been smooth, making less money and management pay is egregiously high. There are better tech stocks elsewhere.
PureFunds ISE Cyber Security ETF (HACK-N)
This ETF allocates their funds in an interest way. Their top 10 holding account for only 34% of the fund. It is the best security ETF to diversify risk.
Best cyber security ETF? He prefers HACK as it gives diversification. It allows him to trade in and out at will, something not always available with individual stocks.
Evolve Cyber Security Index ETF (CYBR-T)
This ETF is also considered recession-proof since cyber security is a necessity in today’s world. With the move towards more digital payments, it will get a lift.
It is a good ETF and a good index but it is not as huge in its market cap. The mega caps will dominate the returns in the short term and this one might suffer in the short term.
Akamai Technologies Inc. (AKAM-Q)
An American network and cloud service provider. It is one of the world’s largest distributed computing platform.
Doesn't know a lot about this one. Buying on dips is a good way of going, but make sure the company is making real money and that there is tangible growth in the cash flow.
Check Point Software Tech (CHKP-Q)
A multinational provider of software and hardware products for IT security. They are in the fibre security market and is one of the larger and more global company in the space.
A security company. He is very positive on the fibre security market, but trying to pick names in this area without doing a lot of work is challenging. Earnings from a lot of these companies has been extremely variable. This is one of the names that you could own, because the firm is quite large…
Citrix Systems (CTXS-Q)
A multinational software company that provides software as a service and cloud computing technologies. They own the Go to Meeting brand used for managing remote networking and meetings.
(A Top Pick Sept 11/09. Up 95%.) Owns the “Go To Meeting” brand, which is used by enterprises to manage remote networking and meetings.
Elbit Systems (ESLT-Q)
An international defense electronics company engaged in a wide range of programs. They are also the world’s biggest producer of military drones. The company is also a big player in cyber warfare.
An Israeli company playing in the defense space. He does not dabble in the defense space. It is rather on the small side. He would prefer others in this space. These stocks run counter to the economic cycles.
FireEye Inc (FEYE-Q)
An enterprise cyber security company that protects against advanced cyber threats. It is one of the imminent security as a service company.
Poster child when it comes to security as a service. Offer software instead of hardware, and the first to get in, so they have a lead. Instead, he owns Palo Alto and Splunk on the cybersecurity side. But it's on their shopping list, once markets settle down.
F5 Networks (FFIV-Q)
An American-based company that specializes in application delivery networking technology for security. They monitor the internet and servers.
Interesting company. Basically they monitor Internet to servers. Came out in March with some really disastrous earnings, but since then have come out with 2 really good quarters. Business has really picked up for them. Customers have come back. Have some new products out there. Really good cash flow going now.
One of the most prominent companies in technology and security. Their chips are used in a variety of phones and computers. The stock price has done extremely well.
His favorite chip stock and he owns it personally. He has a model price over $108 -- over 85% upside. He is not concerned that AAPL will not be buying their chips -- they already sell 120% of their chips. A monopoly, but no one cares. Yield 2.25% (Analysts’ price target is $64.95)
Juniper Networks (JNPR-N)
A networking products company that owned Western Digital. They are in the router world that is critical to future growth of the internet.
He owned Western Digital a few years ago. He still follows it, but finds there are other players, like Juniper or Cisco, who are better investments today.
Lockheed Martin (LMT-N)
An American aerospace,m défense and security company with advanced technologies. It is not terribly overvalued and it’s recession-proof. They would profit from geopolitical issues.
(A Top Pick Jul 02/19, Up 1%) He still owns this and likes the defense sector. They have a $144 billion in back log orders and that will continue to grow. He thinks global defense spending will continue to grow. Aircraft and missile spending continues to grow. Operations a creating $23 billion of cash in…
Northrop Grumman (NOC-N)
An aerospace and defense tech company. They broke above their 200 day average and increased their dividends. They are currently buying back shares.
Since last week, it might be a company you want to take a closer look at. The long term track record has been quite good. He would prefer BA systems because it has a BREXIT overhang on it.
Palo Alto Networks (PANW-N)
A network and enterprise security company. They dominate the cyber security space that is fairly valued. The company is currently transitioning from licenses to subscriptions.
Software security space? PANW or CYBR would be his picks. Although CYBR stock prices just spiked on recent earnings, so he would wait for a pullback on that one.
Proofpoint, Inc. (PFPT-Q)
An enterprise security company that provides software as a service and products for cyber security. They mainly protect emails and are growing internationally.
A cybersecurity company that protects email. He likes their international growth opportunities. They seem to be latching onto Microsoft Office's 365; the more MSFT goes into the cloud, the more customers will need email protection, which is where PFPT comes in. He sees 25% upside in the next 12 months. He's been adding to his…
A major U.S. defense contractor. It is a hybrid defense stock that is involved in cyber security. It currently trades at a good valuation.
The outcome of a merger with United Technology, which had previously spun out their elevator division. She owns this as she held United previously and will continue to hold it. COVID-19 has had a negative impact on their airplane engine division. With lower flying time, there is less repair work required as well. The defense…
Symantec Corp (SYMC-Q)
An American software company that offers security, storage and backup software. It is an anti-virus software company that is moving to a software as a service model.
A great company. Anti-virus software companies are moving to software as a service model, and this business is getting more competitive. But he doesn't know Symantec's funamentals, though he likes their business model. He would dig further and if it looks positive, then buy it.
A multinational tech conglomerate that develops networking hardware. It is a standalone product and are starting to adjust to cloud-based environment.
5G? CSCO has a 14 times PE ratio and 2.8% dividend yield. They have been able to grow by buying a lot of companies. 5G spending may get delayed in to 2021, so this may reduce earnings this year. They have made acquisitions to be able to compete with their peers.
An American multinational tech company. They develop and manufacture computer software, personal computers and services. They are doing very well and have just bumped up dividends by 11%.
Capitalizing on work from home theme, cloud business. Expected to continue to fly in the post-pandemic world. Impressive free cash flow. 16 consecutive quarters of positive earnings surprise growth. Paying a bit of a premium for a 15% growth rate, but not a lot of names are dominant as they are. Yield is 0.95%. (Analysts’…