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With technology advancing in leaps and bounds, cyber threats have become a growing area of concern. In fact, cyber attacks on healthcare organizations, which included ransomware and malware, have increased significantly during the COVID-19 pandemic. Health organizations remain at a risk of cyber threats due to negligence of employees in the form of unencrypted devices, weak passwords and other failures of compliance.
In fact, ransomware is anticipated to remain a significant part of the cybercriminal’s profile in 2021. To that end, malware and ransomware attacks can often shut down devices, serves and even networks to eliminate data, thereby making it inaccessible to healthcare professionals.
Since the cybercriminals are aware of this, there has been an unprecedented rise in healthcare-centric cyber attacks last year. Per major media releases, last June, the U.S. Department of Homeland Security came out with notices indicating cyber vulnerabilities with four devices (PrismaFlex/PrisMax, ExactaMix, Phoenix hemodialysis delivery system and Sigma Spectrum infusion pumps) made by Baxter BAX.
Notably, according to a recent joint advisory by the Cybersecurity and Infrastructure Security Agency, the Department of Health and Human Services and the FBI, there is viable information of higher cybercrime threat to U.S. hospitals and healthcare providers in 2021.
This might make investors apprehensive and keep them at bay but there is no need to go into panic mode just yet.
Enhancements in Cybersecurity a Priority
The anticipation of spike in cyber threats requires the healthcare sector to bolster their cybersecurity methods and ensure strong implementation of legal frameworks.
There are three primary areas wherein advancements can help address these threats and protect the safety of patients and healthcare providers. One of the most important areas is password management, an issue that has been going on for years now, where companies in this sector can implement strong password policies without compromising user experience. Hence, an increase in password management tools can be expected.
Following the footsteps of the banking sector, increase in the usage of multifactor authentication (MFA), especially token-based authentication that can substantially lower the risk of compromised accounts, is projected to be seen. Moreover, a decline in the utilization of phone-based SMS and voice MFA (both weak methods) is anticipated.
Since last year, remote work and care is on the rise and users can be burdened with additional authentication requirements when accessing systems from different locations. This issue can be tackled by deploying access policies based on risk. Hence, we should see risk-based access controls gaining popularity this year.
3 MedTech Stocks to Look Out For
Let’s take a look at a few stocks which investors might be interested in given their efforts to significantly enhance the cybersecurity of their products and services.
Our first pick is Veeva Systems Inc. VEEV, which is a Pleasanton, CA-based company offering cloud-based software applications and data solutions for the life sciences industry. Data security is of huge importance to this Zacks Rank #2 (Buy) company and its customers. In fact, Veeva protects customer data with world-class physical, network, application, and data-level security. Further, the company continues to invest in the more enhanced and modern infrastructure available to offer an innovative, scalable, global, predictable, and secure environment. The company’s long-term earnings growth rate is estimated at 15.8%. Also, the company beat estimates in each of the trailing four quarters, the average surprise being 14.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Next on our list is Melville, NY-based Henry Schein, Inc. HSIC, a leading distributor of health care products and services globally. On Mar 8, 2021, Henry Schein Medical, the medical arm of Henry Schein, inked a distribution agreement with Black Talon Security, LLC – one of the market-leading providers of cybersecurity solutions and data breach security for the healthcare market. Black Talon Security will offer a unique and customized solution to customers of Henry Schein’s medical business to cater to their individual cybersecurity needs. Notably, the Zacks Rank #2 company’s long-term earnings growth rate is estimated at 15.8%. Also, the company beat estimates in each of the trailing four quarters, the average surprise being 49.2%.
There is also another stock that investors might keep a watch on and that is Becton, Dickinson and Company BDX, also popularly known as BD. Headquartered in New Jersey, the MedTech giant is engaged in the development, manufacture and sale of medical devices, instrument systems and reagents. This month, the Zacks Rank #3 (Hold) company announced that it has been authorized as a Common Vulnerability and Exposures (“CVE”) Numbering Authority via the CVE Program. BD is the first medical technology company with such an authorization. For investors’ note, the company had launched the BD Cybersecurity Trust Center in 2020, thereby increasing transparency and partnership with its customers. Also in the same year, it issued its inaugural cybersecurity annual report.
It should also be noted that BD was among the first medical technology companies to develop a Coordinated Vulnerability Disclosure program. This allowed its customers to tackle cybersecurity risks via awareness and guidance. Notably, the company’s long-term earnings growth rate is estimated at 8.8%. Also, the company beat estimates in each of the trailing four quarters, the average surprise being 17.2%.
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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
Baxter International Inc. (BAX) : Free Stock Analysis Report
Henry Schein, Inc. (HSIC) : Free Stock Analysis Report
Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
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