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The big Twitter Inc. (NYSE: TWTR) hack over the last week has put cybersecurity back into the limelight, and investors have taken notice. Today, we'll show you how to capitalize on the surge in interest with three of the best cybersecurity stocks.
And they don't include the world's biggest network security company in Cisco Systems Inc. (NASDAQ: CSCO). That one is too obvious, and we're here to give you insight into some of the companies flying under the radar.
In case you missed it, hackers broke into Twitter recently and took over some pretty big accounts. The hacked accounts offered to send back twice as much Bitcoin to users who sent them Bitcoin. The hackers had no intention of sending Bitcoin back to anyone, keeping all the cryptocurrency sent to them. The Twitter accounts of Bill Gates, Kanye West, Kim Kardashian West, Warren Buffett, and other well-known blue checkmark celebrities were all affected. Barrack Obama and Joe Biden were also making the double-your-money Bitcoin pitch to unwary Twitter users.
As comical as it seems to have celebrities pitching Bitcoin, it is sobering to think of what could happen if there were bad actors looking to accomplish something far more nefarious than stealing some Bitcoin from unsuspecting users. If hackers can break into celebrity Twitter accounts, what else can they get into?
Turns out, quite a bit. In January, someone hacked Amazon Web Services and came up with a list of people connected to the medical and recreational marijuana industry. According to industry analysts, the hackers got a list of 30,000 individuals linked to the medical and recreational marijuana industry, including patients.
In February, Estée Lauder Cos. Inc. (NYSE: EL) suffered a data hack that led to 440 million records being compromised, including the exposure of internal company e-mails and e-mail addresses.
Marriott International Inc. (NYSE: MAR) was hacked for 5.2 million email addresses and rewards club members' personal information in 2018.
The list can go on and on.
That's why investing in cybersecurity is so important right now. Everyone from individuals to Fortune 500 companies to the federal government is spending money to protect their data.
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Spending on cybersecurity over the last five years could be more than $1 trillion by next year. And the growth keeps coming. In fact, analysts at Grandview Research project the cybersecurity sector to double in size in less than a decade.
The growth potential for well-positioned cybersecurity firms could be dramatically higher.
To help you profit from this explosive industry, we've got three of the best cybersecurity stocks to buy now, and that's not including the biggest name of all...
Buy This Cyber-Fortress Company
Fortinet Inc. (NASDAQ: FTNT) offers broad, integrated, and automated cybersecurity solutions to companies worldwide. Fortinet sells hardware and software licenses that provide various security and networking protections, including firewall, intrusion prevention, anti-malware, virtual private network, application control, web filtering, and anti-spam functions.
If there is a program that helps protect data and systems, Fortinet offers its version to its customers in industries that require the best protection available. It sells to sectors like telecommunications, technology, government, financial services, education, retail, manufacturing, and healthcare.
This is a high-growth story. Fortinet has been growing earnings by 65% a year for the past five years. Analysts think that it will continue to grow by around 20% annually for the next five years. Fortinet has routinely beaten analyst estimates, so 20% is probably a low figure for this company.
The SaaS Cybersecurity Play
CrowdStrike Holdings Inc. (NASDAQ: CRWD) is another cybersecurity company that is growing at a rapid pace. The subscription-based cloud cybersecurity protection company has seen its stock price double since the March lows.
CrowdStrike is a market favorite right now. The stock's valuations imply very high growth rates, and analysts, for the most part, concur. Since March, the stock has been a rocket ship, but this company will be a big winner of the post-coronavirus work-from-home world. In that world, cloud cybersecurity is more critical than ever, and that concern will only continue to grow.
Think about how companies across the world will need to secure their data when employees are no longer confined to a single office building. CrowdStrike's software as a service (SaaS) model means it is tapping into a stream of cash from companies that sign up instead of making a lump sum payment up front.
While this is a popular cybersecurity stock, it could be volatile too. Growth stocks like these can soar, but they also tend to drop quickly on negative news. This is one to hang on to long-term, but if you don't like the risk, make sure to set a trailing stop where you'd like to exit.
Buy the stock, pick your pain point, set a stop, and hang on.
The Best Cybersecurity Stock Now Is Flying Under the Radar
There is a stealth cybersecurity stock that no one thinks of today, but it could become a big winner.
The Stealth cybersecurity product offered by Unisys Corp. (NYSE: UIS) is one of the best available cybersecurity packages on the market today.
Stealth works by establishing a software-defined perimeter that creates a Zero Trust environment. According to the company, Stealth stops attacks, even sponsored, sophisticated ones, in their tracks. Think a full-fledged attack from Russia or China's elite hacking united. Should an attacker get inside, Stealth prevents data exfiltration so that the breach is a minor hiccup, not a significant headline.
Unisys is seen as an old-world stodgy big enterprise tech company. To some degree, that may be true, but its cybersecurity offering may be worth more than the current stock price all by itself. Long-term patient investors could see enormous gains form this old school tech giant as its cybersecurity products continue to receive widespread recognition and acclaim.
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