38.33 +0.02 (0.05%)
Pre-Market: 8:01AM EDT
|Bid||37.00 x 1300|
|Ask||0.00 x 800|
|Day's Range||0.00 - 0.00|
|52 Week Range|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.02|
|Expense Ratio (net)||0.60%|
[Editor's note: This story was previously published in February 2019. It has since been updated and republished.]Another day, another hack, another reason to buy a cybersecurity stock. That has been my motto for the better part of the past few years, as a huge surge in digital data volume globally has been accompanied by an equally large surge in headline cyber attacks. The big one was the Equifax (NYSE:EFX) scandal back in mid-2017, but that incident is far from isolated. Everyone from Under Armour (NYSE:UAA) to Wendy's (NASDAQ:WEN) to Uber (NYSE:UBER) to Capital One and even United States universities have dealt with a cyber attack of some sort over the past several years.Concurrent to the rampant rise in cyber attacks, demand for cybersecurity solutions has burgeoned, and cybersecurity stocks have bounced. The Prime Cyber Security ETF (NYSEARCA:HACK) is up roughly 50% since early 2017, almost double the S&P 500's return of 30%.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% The pace of these attacks will only increase as more valuable data shifts online over the next several years. As such, demand for cybersecurity solutions will continue to grow and cybersecurity stocks will continue to outperform.With that in mind, here's a list of 15 cybersecurity stocks that investors should watch over the next several years. Indeed, I think a few of them could be huge winners. Palo Alto Networks (PANW)Source: Sundry Photography / Shutterstock.com When it comes to cybersecurity stocks, the cream of the crop is Palo Alto Networks (NYSE:PANW)."Another day, another hack, another reason to buy a cybersecurity stock" could just as easily read "another day, another hack, another reason to buy Palo Alto Networks stock." In other words, Palo Alto Networks is so big and so good at what it does that the company may as well be a substitute for the entire cybersecurity space.This dominance has manifested itself in a long and steady track record of 20%-plus revenue growth and healthy operating margin expansion, the sum of which has powered an almost 150% rally in PANW stock over the past five years.PANW stock has sold off over the past few months. This selloff is an opportunity. The fundamentals remain strong (28% revenue growth last quarter). The outlook remains robust (27% revenue growth projected for this year). Analysts remain confident (consensus price target implies 30% upside). The secular drivers behind the cybersecurity industry remain vigorous.Thus, recent weakness is an opportunity, and nothing more. Fortinet (FTNT)Source: Sundry Photography / Shutterstock.com While Palo Alto Networks may be the cream of the crop in this industry, Fortinet (NASDAQ:FTNT) isn't too far behind.This is another really big, really strong cybersecurity company that has a strong track record of around 20% revenue growth and strong share price gains. Over the past five years, FTNT is up well over 200%.Revenue growth isn't slowing at all, implying that despite increased competition, Fortinet continues to ride secular tailwinds in cybersecurity to around 20% revenue growth. Thus, so long as cybersecurity tailwinds remain strong, FTNT stock should do well. * 10 Stocks to Buy That Could Be Takeover Targets Valuation was rich for a brief moment in time. That moment in time has now passed. With FTNT stock 15% off its recent highs, the forward price-to-earnings multiple has come down to 33, versus an all time high valuation of over 50 back in mid-2018. With the valuation now at much more reasonable levels, near-term upside looks compelling. As such, now looks like a good time to buy. Check Point (CHKP)Source: jejim / Shutterstock.com Another cybersecurity industry titan is Check Point (NASDAQ:CHKP). And, as an industry titan, CHKP stock is a likely winner if cybersecurity tailwinds stay strong.But, CHKP stock has struggled lately. CHKP hasn't gone anywhere in two years. A lot of this weakness in CHKP stock has to do with anemic revenue growth. Revenue growth was just 4% last quarter, an unusually low mark for a cybersecurity giant.Long story short, it looks like competition is weighing on CHKP stock. Thus, go-forward growth prospects -- while strong -- are muddied by competitive threats. Granted, CHKP stock sports a reasonable valuation at just a little less than 17 times forward earnings. But, that low valuation runs next to low growth, so the stock really isn't a bargain.Analysts aren't in love with this stock, and the chart isn't all that great, either. Thus, while CHKP should head higher in the long run thanks to industry tailwinds, the outlook for the stock in the near- to medium-term is much less promising than it is for FTNT or PANW. FireEye (FEYE)Source: Michael Vi / Shutterstock.com I'd lump cybersecurity company FireEye (NASDAQ:FEYE) more into the Check Point pile than the Palo Alto Networks and Fortinet pile.This is a solid company with healthy industry drivers, but revenue growth isn't robust. In 2019, that's caught up with the stock, which has fallen just over 15% this year. The company is also barely profitable, and that hasn't helped investor sentiment amid sluggish revenue growth.As such, FEYE stock doesn't look like a huge winner in the big picture. * 6 Big Dividend Stocks to Buy as Yields Plunge That being said, there is an argument to buy FEYE stock in the near to medium term. Ever since the start of 2016, FEYE stock has been highly cyclical. In that cycle, the stock usually bottoms when the trailing sales multiple hits three. Right now, we are just above 3. Thus, further weakness in the stock should be expected, but could eventually turn into a medium-term buying opportunity. Proofpoint (PFPT)Source: II.studio / Shutterstock.com Proofpoint (NASDAQ:PFPT) is the nascent, hyper-growth player in the cybersecurity space -- and one of the more exciting cybersecurity stocks.The company isn't all that big (under $7 billion market cap). But, what this company lacks in size, it makes up for in growth, with a 25% year-over-year revenue growth rate reported last quarter, and 20%-plus revenue growth expected in each of the next two years.Because of this massive growth in a rapidly expanding industry, PFPT stock has done quite well. The stock is up about 200% over the past five years.Analysts think this stock heads higher. So do I. Growth rates are huge, the valuation is reasonable and the chart looks good. Okta (OKTA)Source: Michael Vi / Shutterstock.com Hyper-growth cybersecurity company Okta (NASDAQ:OKTA) has been a Wall Street favorite for the past few quarters, and projects to remain one for the next few years, too.Okta has developed what the company calls the Identity Cloud. The Identity Cloud is basically just taking cybersecurity and building it for the individual, as opposed to for an ecosystem or service. The analogy I like to use is that if most cybersecurity solutions are a castle surrounding a company's data, then Okta's Identity Cloud is armor protecting each individual's data.The idea is that if everyone has armor, everyone's data is safe, and you don't need a castle -- which is ideal, because cybersecurity castles can be restricting and inconvenient. A lot of companies are buying into this idea. Okta has reported 50%-plus revenue growth in each of the past several quarters, alongside 30%-plus customer growth. All this growth is high-quality growth, too, since gross margins at the company run north of 70%. * 7 Bank Stocks to Leave in the Vault All in all, Okta has all the right ingredients for huge profit growth over the next few years. Sure, a lot of that profit growth is priced in today, and the stock is extremely expensive. But, in the low rate environment in which we find ourselves today, valuation takes a backseat to growth. So, for the foreseeable future, OKTA stock should run higher. CyberArk (CYBR)Source: photobyphm / Shutterstock.com Much like Proofpoint, CyberArk (NASDAQ:CYBR) is a cybersecurity company characterized by small scale but big growth.CyberArk is even smaller than Proofpoint (just a $4.4 billion market cap). But, growth is really big. Last quarter, revenues rose 29% year-over-year, and deferred revenue rose by more than 30%. Revenue growth is expected to be in the 20% range for the next several years, too.Also much like PFPT, CYBR stock has been a big winner due to its big growth. Over the past year, CYBR stock is almost 70%.Analysts think this run will continue, albeit at a slower rate. That seems reasonable to me. This stock is slightly more expensive than PFPT, but growing at a slower rate, so if you are searching for growth in the cybersecurity space, I'd pick PFPT over CYBR. Nonetheless, secular cybersecurity tailwinds and big growth potential will push CYBR stock higher, too. Cisco (CSCO)Source: Sundry Photography / Shutterstock.com One of the bigger companies on this list, Cisco (NASDAQ:CSCO), is much more than just a cybersecurity company. But, a big part of this company's turnaround narrative is centered on cybersecurity.That part of the Cisco narrative is doing well, and is powering improved financial results. But, it's reasonable to believe that the cybersecurity-led turnaround will slow going forward, as the laps get tougher and as the revenue growth trajectory flattens out again. * 7 Stocks to Buy for Monster Growth That being said, CSCO stock is pretty cheap at just 13.3 times forward earnings, and the chart looks pretty good (outside of the recent trade war inspired collapse).Big picture, CSCO stock is low risk, low reward. It is a low-risk, low-volatility investment with a cheap valuation. But, it also lacks big-time growth drivers to unlock huge share price appreciation in the long term. Carbonite (CARB)Source: Pavel Kapysh / Shutterstock.com Although it is one of the smaller names on this list, Carbonite (NASDAQ:CARB) has one of the better growth narratives in all of cybersecurity.This is a company that is positioning itself as a data protection company. Considering the volume of digital data is exploding higher right now on a global scale, data protection is the right niche to dominate over the next several years.Carbonite's numbers haven't been great as of late. The company has reported continued robust revenue growth. But, those same big growth numbers have fallen shy of the big growth estimates put forth by Wall Street. As such, CARB stock has struggled this year, and is down 69% over the past 52 weeks.The valuation isn't all that bad at six times forward earnings. But, the stock has a ton of downward momentum right now. I'd wait for this momentum to ease up before buying into this falling knife. Qualys (QLYS)Source: Shutterstock The next cybersecurity stock to watch over the next several years is Qualys (NASDAQ:QLYS).The value proposition of Qualys is getting enterprise customers to sign onto their platform, consolidate their security and compliance stacks and cut IT spending. That is a pretty promising value prop, and a lot of customers are buying into it.Last quarter, revenues at Qualys rose more than 15% year-over-year. Gross margins aren't soaring higher, but operating margins are moving higher as big revenue growth is driving operating expense leverage. * 7 Safe Stocks to Buy for Anxious Investors From a valuation perspective, this hyper-growth cybersecurity stock looks fully valued at over 11 times trailing sales. That is about as big as it gets in this industry. But, Qualys isn't the biggest grower in the space. Thus, going forward, valuation will likely weigh on share price performance. Symantec (SYMC)Source: Ken Wolter / Shutterstock.com Of all the stocks on this list, Symantec (NASDAQ:SYMC) is the one that has been struggling the most in the long term.SYMC stock essentially hasn't gone anywhere in five years, mostly thanks to slowing revenue growth, which turned negative in fiscal 2019. Considering competition in this space is only intensifying, it is discouraging to see revenue growth dip into negative territory.That being said, SYMC stock is about as cheap as it gets in this sector. The stock trades at 3.4 times trailing sales and just under 13 times forward earnings. Those are pretty cheap multiples for exposure to cyber defense. Revenue growth has also bounced back into positive territory in fiscal 2020, and is expected to remain in positive territory for the next few years.If the growth trajectory for this company continues to improve, SYMC stock could soar higher. Right now, it looks like that will indeed happen. As such, SYMC stock could run higher over the next few quarters as growth comes back into the picture. Akamai (AKAM)Source: Ken Wolter / Shutterstock.com One cybersecurity stock with a very attractive and multi-faceted growth narrative is Akamai (NASDAQ:AKAM).The Akamai growth narrative is really quite broad. On one end, the company's fastest-growing segment is its Cloud Security solutions. Revenues in this segment are consistently growing around 25% to 35% year-over-year each quarter, and momentum is strong due to the security portfolio including new products.On the other end, Akamai provides solutions that enable the shift from linear content to internet content. This shift is only gaining momentum, and as such, Akamai's growth narrative and numbers are only getting better. * 7 High-Yield REITs to Buy (Even When the Market Tanks) Valuation is a concern for this stock. But, the fundamentals are pretty good. Thus, while I don't think AKAM stock has another 20%-plus upside in its tank over the next 12 months, I do see this stock heading higher in a multi-year window. Splunk (SPLK)Source: Michael Vi / Shutterstock.com Another high-growth name in this space is Splunk (NASDAQ:SPLK).Splunk essentially operates in the world of turning data into actionable insights. This is a good place to be. It puts Splunk at the heart of a $55 billion addressable market, and that market has a ton of tailwinds. Revenues currently sit around $2 billion on a trailing 12 month basis, so there is clearly a long runway for big growth. Indeed, in the long run, SPLK stock should run significantly higher.But, valuation is a concern. Specifically, it appears that investors quickly recognized Splunk as a long-term winner, and all rushed into SPLK stock. That caused the valuation to sprint ahead of the fundamentals. As such, over the past year, SPLK stock hasn't really gone anywhere -- despite continued huge revenue growth -- because the fundamentals are trying to catch up with the valuation.Eventually, they will. When they do, SPLK stock will be ready to take a another meaningful leg higher, and another one after that, too. Long term, this stock is going higher. F5 Networks (FFIV)Source: Michael Vi / Shutterstock.com F5 Networks (NASDAQ:FFIV) has fallen upon hard times. But, that could change soon. Over the past year, the stock is down over 30%, while most of its peers are up over the past 52 weeks.Why the big drop? A few bad quarters with revenue misses and light guides, the sum of which have implied to investors that the growth story here is slowing.Having said that, the valuation on FFIV stock is now very attractive. FFIV projects as a sub-10% earnings growth company over the next several years. At one point in time, this was a 20 times forward earnings multiple stock. That's too big for sub-10% profit growth. Today, though, the forward earnings multiple is down around 12. That's much more in-line with sub-10% profit growth. * 7 Strong Buy Stocks With Over 20% Upside Perhaps that is why the consensus price target on FFIV stock is 20% above the current price tag. I think the analysts are right on this one. Near-term valuation-driven upside in FFIV stock is compelling. Zscaler (ZS)Source: Michael Vi / Shutterstock.com Freshly public and relatively small, Zscaler (NASDAQ:ZS) is one of the most exciting and risky cybersecurity stocks on this list.Zscaler went public at $16 per share in March 2018. The IPO was a huge success. ZS stock doubled in its first day of trading, closing at $33. The momentum hasn't really stopped. Today, ZS stock is in the $70 range.The hype makes sense. Zscaler is a cloud security company that is growing very, very quickly with very high gross margins and a ton of visibility to produce huge profits at scale. The company is disrupting a huge, nearly $20 billion cloud and mobility market, and revenues over the past 12 months amount to less than $300 million.Thus, the long-term growth narrative supporting ZS stock is quite promising. But, this is a $9 billion company that is expected to do around $400 million in sales next year, so the stock is trading at a rather huge 22.5X forward one year sales multiple. That isn't a risk-free investment. As such, ZS is the high-risk, high-reward name in this cybersecurity bunch.As of this writing, Luke Lango was long HACK, PANW, FTNT, OKTA, PFPT and SPLK. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Hot Stocks Leading the Market's Blitz Higher * 7 Strong Buy Stocks With Over 20% Upside * 5 Growthy Stocks Trading Below 15X Earnings The post 15 Cybersecurity Stocks to Watch as the Industry Heats Up appeared first on InvestorPlace.
Cybersecurity company Cloudflare Inc. announced it plans to go public, according to a Securities and Exchange Commission filing Thursday. The company plans on raising $100 million but that number is usually used as a placeholder and is subject to revision. The San Francisco-based company said its service blocks 44 billion cyber threats from 20 million internet properties daily. In 2018, Cloudflare reported a loss of $86.1 million on revenue of $192.7 million, compared with a $10.7 million loss on revenue of $134.9 million in 2017. Cloudflare plans to list under the ticker "NET" on the New York Stock Exchange. Goldman Sachs, Morgan Stanley and J.P. Morgan are among the underwriters. Earlier in the month, Cloudflare dropped 8chan as a customer, condemning the unmoderated message board as "a receptive audience for domestic terrorists" following recent mass shootings. Cloudflare's IPO would follow 2019's other big cybersecurity IPO CrowdStrike Holdings Inc. , which went public in June. While Crowdstrike shares are trading 176% above their IPO price, the ETFMG Prime Cyber Security ETF is up nearly 12% for the year while the Renaissance IPO ETF is up nearly 30%, compared with a 17% gain in the tech-heavy Nasdaq Composite Index .
This is the situation which many Capital One customers currently fear, as in one of the biggest data breaches ever, a hacker gained access to more than 100 million Capital One customers' accounts and credit card applications. The hacker is accused of breaking into a Capital One server and gaining access to 140,000 Social Security numbers, 1 million Canadian Social Insurance numbers and 80,000 bank account numbers, in addition to an classified quantity of people's names, addresses, credit scores, credit limits, balances, and other information, according to the bank and the US Department of Justice. The company said Monday night it discovered the breach on July 19, Capital One Financial shares fell 6.1% Tuesday, a day after the disclosure of a data breach that impacted about 100 million individuals in the U.S.
[Editor's Note: This article was originally published on July 26, 2018, and was updated on July 30, 2019, with the most recent information.]Investors looking for industry-level attribution for the technology sector's strength should not look past software. Simply put, among technology exchange traded funds (ETFs) this year, software ETFs are represent sources of strength.Source: Shutterstock This is one nugget cementing the strength of software ETFs: the S&P North American Technology-Software Index as measured by the iShares Expanded Tech-Software Sector ETF (BATS:IGV) is up 32% year-to-date while the tech-heavy Nasdaq-100 Index is up 25.8%. However, investors will pay up for the privilege of owning software stocks and ETFs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"As a group, software companies enter the second-quarter earnings period trading at record valuations," according to Barron's. "Macquarie Capital analyst Sarah Hindlian finds that the average software stock is trading for a record 7.1 times next fiscal year's projected revenues. The one-year average valuation on that basis is 5.6 times, she reports. The five-year average is 4.4 times and the 10-year average is 3.9."Adding to the bull thesis for software ETFs are robust revenue expectations across a wide array of software platforms, including cloud, cybersecurity, customer relationship management (CRM), internet applications and video games. * 7 Stocks to Buy With Over 20% Upside From Current Levels Investors can participate in this corner of the technology sector with the following software ETFs. iShares North American Tech-Software ETF (IGV)Expense Ratio: 0.47% per year, or $47 on a $10,000 investment.The iShares North American Tech-Software ETF is one of the largest, oldest and most traditional software ETFs. Home to over $2.8 billion in assets under management, IGV tracks the aforementioned S&P North American Technology-Software Index, cap-weighted software gauge dominated by the industry's largest players.Just four stocks -- Salesforce.com (NYSE:CRM), Microsoft (NASDAQ:MSFT), Adobe Systems (NASDAQ:ADBE) and Oracle (NYSE:ORCL) -- combine for over a third of this software ETF's weight. Those are the breaks with industry and sector funds that are weighted by market capitalization, but investors probably are not complaining about IGV's 32% year-to-date gain.Assuming software stocks maintain their leadership perch in the technology sector, this will be the fourth year in the past five that IGV has outpaced the broader XLK.The potential quibble with IGV is that its price-to-earnings ratio is over 40, implying a significant premium relative to broader technology funds. SPDR S&P Software & Services ETF (XSW)Expense Ratio: 0.35%For investors looking for a software ETF that is not heavily dependent on the industry's large- and mega-cap names, the SPDR S&P Software & Services ETF (NYSEARCA:XSW) is a suitable alternative. This software ETF is an equal-weight fund and none of its 159 holdings commands a weight north of 1%.XSW's top 10 holdings combine for just 9.2% of the fund's weight. This software ETF is up 35% year-to-date, indicating its tilt toward smaller software stocks is rewarding investors. While it is not driven by the industry's largest names, its P/E ratio of 25 is more attractive than IGV's. * 7 Semiconductor Stocks to Buy for Your Inner Geek The XSW ETF also boasts gains of 19% in the last year, 25% in the past three years and 17% in the past five years. Invesco Dynamic Software ETF (PSJ)Expense Ratio: 0.63%The Invesco Dynamic Software ETF (NYSEARCA:PSJ) is another example of a software ETF with an alternative weighting methodology. PSJ follows the Dynamic Software Intellidex Index.That index "is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value," according to Invesco.Implementation of those factors results in a lineup of just 30 stocks, a far smaller roster than IGV of XSW have. PSJ is up over 40% this year, due in part to contributions from the likes of Microsoft and Salesforce. Said another way, PSJ is not just one of the best software ETFs, but one of the best tech industry ETFs of any stripe in 2019.While this software ETF allocates over 81% of its weight to growth stocks, its annualized volatility has only been slightly higher than the Nasdaq-100 Index's over the past three years, a period in which PSJ has trounced that benchmark. ETFMG Prime Cyber Security ETF (HACK)Expense Ratio: 0.6%The ETFMG Prime Cyber Security ETF (NYSEARCA:HACK) is not a pure software ETF, but software is a significant part of the broader cybersecurity spectrum.HACK tracks the Prime Cyber Defense Index, which is "comprised of companies that offer hardware, software, consulting and services to defend against cybercrime," according to the issuer.Over 62% of HACK's holdings are software companies, split among the systems and internet software industries. HACK has the potential to be a dominant name over the long term. * 7 Oversold Stocks To Buy Right Now Just three years ago, cybersecurity attacks resulted in damages of $3 trillion, but that number could jump to $6 trillion by 2021, meaning companies and governments will be spending in a big way on warding off cyber threats. HACK and cybersecurity stocks were pinched by the China trade conflict as highlighted by a big May-June decline that has the fund up "just" 23% this year. ETFMG Video Game Tech ETF (GAMR)Expense Ratio: 0.74%Hardware is part of the conversation when discussing video game investing, but the ETFMG Video Game Tech ETF (NYSEARCA:GAMR) is a credible software ETF, as it has significant holding overlap with more traditional software ETFs. In fact, some of GAMR's top 10 holdings, including Take-Two (NASDAQ:TTWO), are top 10 holdings in other such funds.Past performance is never a guarantee of future returns, but it cannot be ignored that GAMR has more than doubled over the past three years. Plus, this software ETF has a plethora compelling future catalysts that could signal its run still has momentum. Digitalized gaming is one of those catalysts."The percentage of digitally downloaded video games rose from 31% in 2010 to 74% in 2016," according to GAMR's issuer. "This is expected to climb to nearly 93% by 2021."GAMR looks more attractive today than when we first ran this piece a few months by virtue of an almost 18% decline off its 52-week high. Investors interested in this fund may want to wait for it snap out of its recent funk. Global X Future Analytics Tech ETF (AIQ)Global X Funds logo. (PRNewsfoto/Global X Funds)Expense Ratio: 0.68%The Global X Future Analytics Tech ETF (NASDAQ:AIQ) is one of the newest additions to the software ETF fray, having debuted in 2018. AIQ follows the Indxx Artificial Intelligence & Big Data Index.This is not a pure software fund, but there are myriad intersections between the artificial intelligence and big data themes and software. Several of AIQ's top 10 holdings, including Microsoft and Adobe, reside in more pure, traditional software ETFs. Ovearll, more than 51% of AIQ's 83 holdings are classified as software companies. * 7 Stocks to Sell This Summer Earnings Season AIQ is a little over a year old and is on a torrid pace this year with a gain of 32%. First Trust Cloud Computing ETF (SKYY)Expense Ratio: 0.6%It is just one example, but one reason why shares of Microsoft are up almost 40% this year is the cloud computing boom. Cloud computing is also powering another company you've probably heard of -- Amazon (NASDAQ:AMZN). For the investors who do not want to stock pick among cloud names, the First Trust Cloud Computing ETF (NASDAQ:SKYY) is the idea to consider.SKYY is not a dedicated software ETF, but if you combine the fund's exposure to traditional and internet software purveyors, the figure is north of 54%. Like some of the other funds mentioned here, SKYY has significant long-term potential."The widespread adoption of cloud-based software is shifting the dynamics of the software industry, spreading the reach of enterprise-class applications to smaller businesse and reducing the costs involved in creating, selling, and supporting applicatios," according to Barron's.The worldwide public cloud services market is projected to grow 17.5% in 2019, and according to Sid Nag, research vice president at Gartner, "Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three time the growth of overall IT services."Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Small-Cap Stocks to Buy Before They Grow Up * 7 Stocks to Buy With Over 20% Upside From Current Levels * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post 7 Scorching Software ETFs appeared first on InvestorPlace.
Cybersecurity stocks and the related exchange-traded funds (ETFs) are on torrid paces this year. The ETFMG Prime Cyber Security ETF (NYSEARCA:HACK), the oldest cybersecurity ETF on the market, is up nearly 24% and a confluence of factors bode well for continued upside among stocks residing in this corner of the technology sector.Earlier this month, cybersecurity stocks and ETFs like HACK surged on news that semiconductor giant Broadcom (NASDAQ:AVGO) is continuing its quest to diversify its product mix away from chips by acquiring cybersecurity purveyor Symantec (NASDAQ:SYMC).While many investors may prefer traditional, diversified technology ETFs to cybersecurity fare, there are sound fundamental reasons to consider cybersecurity ETFs for the long haul. After all, cybersecurity ETFs provide exposure to one of the truly riveting exponential growth trends on the market today.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"In 2004, the global cybersecurity market was worth $3.5 billion -- and in 2017 it was expected to be worth more than $120 billion. The cybersecurity market grew by roughly 35X over 13 years entering our most recent prediction cycle," according to CyberSecurity Ventures. "Worldwide spending on information security (a subset of the broader cybersecurity market) products and services exceeded $114 billion in 2018, an increase of 12.4 percent from 2017, according to Gartner, Inc. For 2019, they forecast the market to grow to $124 billion, and $170.4 billion in 2022." * 10 Best Cryptocurrencies to Keep on Your Radar In addition to HACK, here are some other cybersecurity ETFs to consider. iShares Cybersecurity and Tech ETF (IHAK)Expense Ratio: 0.47%, or $47 annually per $10,000 investedThe iShares Cybersecurity and Tech ETF (NYSEARCA:IHAK) is just over a month old, making it the newest cybersecurity ETF, but it has a feather in its cap: it is also one of the cheapest cybersecurity ETFs on the market. This rookie fund tracks the NYSE FactSet Global Cyber Security Index and holds almost 40 stocks with Symantec being its largest holding.While IHAK is a new cybersecurity ETF, it is one with potential for patient investors and one that may just be at the right place at the right time."The unprecedented cybercriminal activity we are witnessing is generating so much cyber spending, it's become nearly impossible for analysts to accurately track," notes Cybersecurity Ventures. "We anticipate 12-15 percent year-over-year cybersecurity market growth through 2021, compared to the 8-10 percent projected by several industry analysts."At the industry level, IHACK features exposure to providers of cybersecurity hardware, software, products and services. BlueStar Israel Technology ETF (ITEQ)Expense Ratio: 0.75%The BlueStar Israel Technology ETF (NYSEARCA:ITEQ) has gained some acclaim for being an excellent way of bringing international diversity to technology investing. While ITEQ is positioned as a diversified technology fund, it is also very much a cybersecurity ETF because Israel is one of the world's leaders when it comes to cybersecurity services and software."Investments in cybersecurity firms in Israel crossed the $1 billion mark for the first time in 2018 as interest by foreign investors surged, a January report by Start-Up Nation Central, which tracks Israel's tech industry, showed," reports The Times of Israel. "Israel's cyber industry is second only to that of the US, taking 20 percent of the overall venture-backed cyber investments worldwide, according to an analysis of PitchBook and Start-Up Nation Central databases." * 7 Best of the Best Fidelity Funds to Buy ITEQ's technology focus is a difference maker. The quasi-cybersecurity ETF is up nearly 28% year-to-date, nearly double the returns of the MSCI Israel Index. First Trust Nasdaq Cybersecurity ETF (CIBR)Expense Ratio: 0.60%The First Trust Nasdaq Cybersecurity ETF (NASDAQ:CIBR) was the second cybersecurity ETF on the scene, and, today, the fund has nearly $1 billion in assets under management. CIBR, which turned four years old earlier this month, follows the Nasdaq CTA Cybersecurity Index. CIBR holds 44 stocks with a median market value of $3.26 billion, indicating the fund tilts toward smaller mid-cap fare.That said, this cybersecurity ETF is home to some large-cap technology names, including Cisco Systems (NASDAQ:CSCO) and Palo Alto Networks (NASDAQ:PANW). Five industry groups are represented in CIBR, but the fund devotes over 56% of its weight to software makers. That is a good thing due to the rapid growth expected in the cybersecurity software market.Additionally, many cybersecurity software makers are linked to cloud computing, another fast-growing tech segment. Due to the intersection of cloud computing and cybersecurity software, many of the companies operating in this sphere are appealing acquisition targets for larger, cash-rich technology companies. With software powering cybersecurity growth, CIBR remains a practical, long-term option among cybersecurity ETFs.As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Cybersecurity ETFs With Loads of Growth Potential appeared first on InvestorPlace.
Shares of cyber security companies were broadly higher in morning trading Wednesday, after Bloomberg reported that Symantec Corp. was in talks to be acquired by Broadcom Inc. . The ETFMG Prime Cyber Security ETF rose 1.7%, 50 of 54 equity components trading higher. Symantec's stock led the way with a 13.3% surge, with trading volume of 30.1 million shares more than 4-times the full-day average. Among other more-active ETF components, shares of CrowdStrike Holdings Ind. ran up 3.3%, FireEye Inc. rallied 3.2%, Cisco Systems Inc. rose 1.2% and Zscaler Inc. climbed 1.7%. The ETF has now advanced 21.1% year to date, while the S&P 500 has gained 19.3%.
Shares of Symantec Corp. rocketed 19% in premarket trading Wednesday, putting them on track to open at a 14-month high, after Bloomberg reported late Tuesday that the security software company was in advanced talks to be acquired by Broadcom Inc. . Broadcom shares slumped 3.2%. Wedbush analyst Daniel Ives said he believes if a deal is done it will be in the $26 to $28 a share range, which would be a 18% to 27% premium to Tuesday's closing price of $22.10, and which would value Symantec at $16.1 billion to $17.3 billion. "With Symantec in the midst of coming off a sudden CEO departure, soft results/guidance, and a myriad of company specific/secular headwinds we believe now would be the golden time for the company and its board to finally consider a sale of the business," Ives wrote in a note to clients. For Broadcom, Ives said the company would be doubling down on its software bets following last year's $18 billion buyout of CA Technologies, "which still remains a head scratcher to many." Symantec's stock has rallied 17% year to date and Broadcom shares have advanced 16%, while the ETFMG Prime Cyber Security ETF has run up 19% and the S&P 500 has gained 19%.
Chip-related stocks lead the broader tech sector higher following a truce in the trade war with China, which threatens to drag heavily on suppliers of semiconductors.
Technology sector took a hit badly in yesterday's trading session on antitrust scrutiny concerns that wiped out more than $133 billion from the market value of the four technology giants.
What Can We Expect from Symantec’s Q4 Results?Revenue fall of 2.2% in the fourth quarter Cybersecurity (HACK) company Symantec (SYMC) is scheduled to announce its fiscal 2019 fourth-quarter earnings results (for the year that ended in March) on
Why Did Proofpoint Stock Fall 7.5% in After-Hours Trading?(Continued from Prior Part)Is PFPT overvalued?Proofpoint (PFPT) stock fell 7.5% in after-hours trading on April 25, 2019, despite the company’s beating Wall Street earnings and revenue
Why Did Proofpoint Stock Fall 7.5% in After-Hours Trading?Sales rose 25% YoY Shares of cybersecurity (HACK) company Proofpoint (PFPT) fell 7.5% in after-hours trading on April 25. Proofpoint managed to beat analysts’ sales and earnings estimates in
These Two Tech Stocks Lost Over 5% on April 26(Continued from Prior Part)Proofpoint sales rose 25% YoY in Q1 2019Cybersecurity (HACK) company Proofpoint (PFPT) fell over 5% on April 26 to close trading at $124.55. The stock is currently trading 65%
Will Fortinet Beat Earnings Estimates in Q1 2019?Revenue estimated at $471.8 million Cybersecurity (HACK) company Fortinet (FTNT) is scheduled to announce its first-quarter results on May 2. Analysts expect the company to post revenues of $471.8
Will FireEye Beat Wall Street Estimates for Q1 2019?Revenue growth of 5.6%Cyber security (HACK) company FireEye (FEYE) is set to announce its first-quarter earnings results on April 30. Analysts expect the company to post sales of $210.2 million in
Will Proofpoint Continue to Beat Earnings Estimates in Q1?Revenue expected to rise 22.70%High-growth cybersecurity (HACK) company Proofpoint (PFPT) is scheduled to announce its first-quarter earnings results on April 25. Analysts expect the company
How Are Cybersecurity Stocks Trading Compared to Valuations?(Continued from Prior Part)Stock returnsCybersecurity (HACK) leader Symantec (SYMC) has generated returns of -12.4% in the last 12 months. Since the start of 2019, the stock is up by 29%.
How Are Cybersecurity Stocks Trading Compared to Valuations?Stock returns Cybersecurity stocks have generated impressive returns over the last few years. The Prime Cyber Security ETF (HACK) has gained 21% this year and 77% in the last three years.
Are These Tech Stocks Overvalued after Nearing 52-Week Highs?(Continued from Prior Part)Stock returnsCybersecurity (HACK) stock Fortinet (FTNT) has generated returns of 68% in the last 12 months. The stock easily outperformed broader markets last
A version of this article was published in the December 2018 issue of Morningstar ETFInvestor. Download a complimentary copy of Morningstar ETFInvestor by visiting the website. Simple, compelling stories tap into our emotions, hijack our ability to think rationally, and persuade us to pursue investments that are unlikely to perform well. The South Sea Company of early 18th century England exemplifies how a well-spun narrative can cause investors to ignore facts and disrupt their ability to make sound investment decisions.