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.
He is looking at investing in this one personally. Very speculative and very early stage growth opportunity. Have software that takes advantage of the “dark” cores in computers. Computers were not able to keep up to speed so ended up having computers coming with 2 and 4 cores. They will use the unused cores and…
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.
Dead money for quite a few years. The technology was tied to laptops but now everyone is using tablets. Thinks earnings will come through with earnings from Samsung agreement.
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 Apr 04/18, Up 25%) It always grows organically. The knock against it is that grows modestly at 1-3%. They buyback shares and occasionally do tuck-in acqusitions. But their growth rate has accelerated despite Brexit and American trade issues; they still get the deals they want in those territories. It's trading at higher…
The company is consolidating and growing slowly at 5 – 10% earnings growth. They are currently transitioning from hardware to software focused on security solutions.
They have done some smart things on the software and autonomous driving side. They have just fallen off the radar for the big investment managers. He likes to be a buyer at $8.50, but there is just not the momentum from the money managers.
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.
Cyber security. [Caller concerned about risks of an ETF failing] An ETF does not fail, but they could close it if it did not work. It costs $25k-$30k per year to run an ETF. You need about $8-10 Million in the ETF to just start making money. There is only $2 Million in it right…
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.
He doesn't know some of the stocks in this. MER isn't bad at 55 basis points. An interesting ETF, though nich-y for him. If you want to take on some of the risk, there's nothing wrong with this one. An interesting part of the marketplace and increasingly important. But what is the quality of the…
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.
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.
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.
Israel’s largest publicly traded defence contractor. It is divided into 3 segments. One third is being the largest drone producer globally with the broadest product line. The average drone is military and about 7 years old, and thinks they are going to get replaced. A second third is traditional defence electronics such as fire control…
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.
This cyber-security business just reported earnings and highlighted the growth in demand for their end-product. He does own this in his portfolio.
F5 Networks (FFIV-Q)
An American-based company that specializes in application delivery networking technology for security. They monitor the internet and servers.
Dominates in application network controllers with 45% market share. Integral and necessary part of the evolution towards Cloud computing and consolidation of data centres. Could be a triple to a 5 bagger stock in the next 5 to 6 years.
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.
Trades at a reasonable multiple. It's a mature market. Gross margins won't expand. They are getting hit by the new China tariffs.
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.
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.
This pays a nice dividend. They have a free cash flow yield that approaches 9%, so it is very profitable. Investors can expect to make the free cash flow yield plus any growth. A good start for investors to take a look at.
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.
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.
Security is a very important theme in the market. There are a couple of themes that have big tailwinds right now. Certainly the Internet of things, i.e., connected devices to the Internet, which means it is a great thing for semiconductor and software companies. The big issue that a lot of companies have right now…
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.
(A Top Pick Jun 08/18, Down 15%) The geopolitical background has changed. He still likes it and keeps it on his radar. There can come a time when this makes sense again and he will jump back in.
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 Top Pick Apr 11/06. Down 9.8%.) A quality company that will be around for the long-term. Completed a fairly big merger where the market didn't understand the synergies. Competition threats have been overblown. Well diversified.
A multinational tech conglomerate that develops networking hardware. It is a standalone product and are starting to adjust to cloud-based environment.
(A Top Pick Jul 17/18, Up 37%) He has recommended this for many years. The model price is over $73. A back door into blockchain technology. Yield 2.43%
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%.
Sell 25% and buy Comcast, Cisco or hold the cash? MSFT has done very well in the last 5 years under the current CEO. They just won the US Defence contract, possibly influenced by Trump. MSFT is one of the most valuable companies in the world. However, if there is a wide market sell-off, MSFT…