Bull of the Day: VASCO (VDSI) - Bull of the Day

It doesn't take private photos of Jennifer Lawrence being leaked on the internet for the public to recognize the need for cyber security. Each day more and more data is transferred between consumers and businesses alike via the internet. Keeping this information private between parties is paramount in many cases. Sometimes though, that data enters the wrong hands and it can be very damaging. Today's Bull of the Day is a company that seeks to minimize data theft by advancing their authentication technologies.

VASCO VDSI is a global leader in strong authentication, digital signatures, and identity management solutions specializing in securing financial transactions and protecting access to data and applications. The company was listed on the NASDAQ in 1997 and is a leader in Gartner Magic Quadrant for user authentication. This growth company had a 21% CAGR in revenues from 2003 to 2013 and has been on a streak of 46 consecutive quarters of profitability.

VDSI counts more than 10,000 customers in over 100 countries. More than half of the top 100 global banks and 1,700 financial institutions rely on VASCO. They offer on-premise, mobile, and cloud based solutions.

Now is as good a time as any to invest in the cyber security market. Data breaches are up 30% year over year and the industry has a CAGR forecast of 14% through 2019. Two out of three cyber-attacks focus on login credentials at some point in the attack. Authentication and a digital signature platform provide protection against these attacks and the newest attacks such as Heartbleed, Emmental, and others.

The enormous opportunity in this market is only part of the reason for the Zacks Rank #1 (Strong Buy) this stock has. A big part of it is the company's earnings history and the consistent surprises they've enjoyed recently. Each of the last four quarters VDSI has surprised to the upside, with an average surprise of 10 cents.

Recently analysts have raised their estimates for the next year, current year, and the current quarter. This year's consensus number has jumped from 38 cents to 48 cents and next year's numbers are up from 51 cents to 57 cents.

The chart is all bullish as can be. When you see a chart like this, the first instinct you have is that you've missed out on the run. It sometimes can go against your “Buy low, sell high” nature. But don't forget one of the other unwritten laws of the market, “Buy high, sell higher.” Yes, this stock has enjoyed a stellar run this year after trading as low as $6.47 in February. Since then, it's been up, up, and away for a stock that now trades above $16.

But take a closer look and you can see it's still trading well above its 40 day moving average, implying that a bullish trend is still very much intact. Further, the volume has been increasing consistently over the last several months. That tells me that other eyes on the street are beginning to take notice and this stock can continue its breakout for quite some time.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.

Click to get this free report

VASCO DATA SEC VDSI: Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Market News and Data brought to you by Benzinga APIs