Cybersecurity Stocks To Watch
June 22, 2015
Hack attacks are occurring with increasing frequency and severity across more mainstream and spotlight companies and agencies. While small-scale attacks still occur, it’s the government breaches and multi-billion dollar market cap companies that draw attention to just how severe the issue of cybersecurity really is.
Below are the top five stocks in the sector and one ETF that contains three cybersecurity companies.
Palo Alto Networks Inc (NYSE: PANW)
- With a market cap of $14.85 billion, this enterprise security platform succeeds because of its Next-Generation Firewall, Advanced Endpoint Protection and its Threat Intelligence Cloud.
- Palo Alto’s net profit margin from 15Q2 was -19.62 percent with a -37.98 percent return on average equity.
- Palo Alto has been trading recently around $177.97.
Cyberark Software Ltd (NASDAQ: CYBR)
- With a market cap of $2.23 billion and a P/E of 367.06, this IT security solution provider services organizations across the globe and would be a valuable asset to have in a serious active trader’s portfolio.
- Cyberark’s net profit margin from 14Q4 was 18.34 percent with a 7.55 percent return on average equity.
- Cyberark has been seen trading recently at $70.37.
Checkpoint Systems, Inc. (NYSE: CKP)
- This manufacturer and provider of tech-driven solutions appeals specifically to those in the retail and apparel sector. Checkpoint provides EAS systems and radio frequency tags, operating in three core areas: Merchandise Availability Solutions, Retail Merchandising Solutions and Apparel Labeling Solutions.
- Checkpoint has a market cap of $447.61 million and has been trading over the last year between $9.62 and $14.48.
- Checkpoint’s most recent net profit margin (15Q1) came in at -0.58 percent, with an average equity return coming in at -0.96 percent.
- Checkpoint was seen trading recently at $10.61.
FireEye Inc (NASDAQ: FEYE)
- With a market cap of $8.28 billion and 156.33 million shares, this cybersecurity company provides not only hacking detection and resolution, but also prevention using virtual-machine technology and intelligence. Operating globally, FireEye is worth serious consideration for serious investors.
- FireEye’s net profit margin from 15Q1 was -106.85 with a -44.22 percent return on average equity.
- FireEye traded recently at $52.88.
- With a market cap of $194.60 billion and a P/E of 18.65, this enterprise software and hardware provider could add a different flavor to a well-stacked, well-diversified portfolio. With “cloud infrastructure-as-a-service”, Oracle fills a niche service.
- Oracle’s net profit margin from 15Q1 was 26.75 percent with a 20.93 percent return on average equity.
- Oracle recently traded at $44.56.
PureFunds ISE Cyber Security ETF (NYSE: HACK)
- This highly recommended ETF has been trading over the last 52 weeks between $24.44 and $32.78, most recently seen trading at $32.68.
- HACK has a market cap of $988.41 million and 30.45 million shares.
- With 31 niche tech stocks, HACK represents a plethora of security and technology areas in need of protection.
- The top holdings in HACK include FEYE and CYBR, in addition to notable mentions Qualys Inc and Juniper Networks Inc.
One Thing To Watch For
- HACK is the only ETF of its kind – for now. But, First Trust has filed to list a competing ETF, expected to be available later this year or in the early part of 2016. The SEC filing lists the fund as “First Trust NASDAQ CEA Cybersecurity ETF” and should remain on your radar.
Regardless of how invested you desire to be in the cybersecurity realm, adding a preferred stock or two to your portfolio can only prove beneficial. The sector is taking off at a phenomenal tick and chances are it will only continue to do so. Whether you desire your exposure to be in a lower priced stock (such as Checkpoint); a stock less focused solely on cybersecurity, but tech innovations more broadly (such as Oracle); or if ETFs are more your pace (snag up HACK and watch for First Trust’s soon-to-be peer), cybersecurity is one area that should not be overlooked in diversifying your portfolio.
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