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 Top Pick Jan 09/20, Down 20%) Orders have slowed down a bit. High quality name. Stock got a bit ahead of itself. What they do is mission-critical. Significant holding for her. Covid delayed projects, but they'll resume and business will improve from here.
The company is consolidating and growing slowly at 5 – 10% earnings growth. They are currently transitioning from hardware to software focused on security solutions.
He owned it a few years back but it did not meet his expectations for growth. One day this one will be taken over by one of the larger global tech companies.
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.
Allan Tong’s Discover Picks CYBR is a low-vol ETF, averaging only 4,600 shares daily and charges an MER of 0.4% against a 0.17% dividend. It’s also trading at its 52-week high of $37. In other words, wait for a pullback to, say, the low-$30s to make this worth your while. Read Cybersecurity Stocks, Clean Energy…
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.
Dropbox It'll continue to benefit from work from home. Cloud computing will remain important. It'll be more and more important for them to upsell higher services to their customers. He prefers, likes and uses (in his office) CTXS which offers more office functionality than Dropbox currently. CTXS is also in the cloud business. Dropbox is…
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.
(A Top Pick Aug 02/19, Down 13%) They make defence electronics and a strong performer since their last acquisition. He's holding this long term. A headwind is the market moving towards cyclical businesses instead of defence stocks. But ESLT still has strong long-term prospects.
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.
It is a value trap and Intel has been a serial disappointer. The report from last night stated their data centre business continues to deteriorate. They are getting beaten by their competitor, notably AMD. Stay clear of Intel.
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.
The Democrats have a history of spending on defence, actually, something to remember if Biden wins the Nov. 3 vote. It reports tomorrow. A very good company.
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.
Stockchase Research Editor: Michael O'Reilly NOC is a security company providing products like autonomous systems and cybersecurity and it operates in the US, Asia-Pacific and internationally. It has over $70 billion in backlog orders, which are principally with government agencies like the US Defense department. Recent earnings were up 19% with a 53% increase in…
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.
The CEO has vision and the company has gotten big into cloud computing and acquisitions (https://finance.yahoo.com/news/palo-alto-networks-completes-acquisition-200500673.html). He'd make this a 5% position.
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.
Wonderful promise, you just need patience. Held back because of commercial aerospace exposure. Longer term, as things start to normalize, this company has lots of legs. Ton of free cash flow, which should get back to the shareholder and further bolster the price.
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.
They may not do well in the work-at-home space. This space demands more and more bandwidth and dispersion is greater. Cisco Webex is a competitor to Microsoft Teams. The average ticket for their product is very high and board members are reticent of spending. Once we see more clarity for after the pandemic, it will…
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%.
He expects them to report excellent numbers on Tuesday. The CEO is excellent. Their problem is that they have business than they can handle.