Market Overview

3 Cybersecurity Plays For The New Year

3 Cybersecurity Plays For The New Year

Cybersecurity was a hot topic over the past year after several high profile public and private sector attacks brought attention to the growing problem of information breaches. Most investors who picked up cybersecurity stocks at the beginning of 2015 saw sizable gains, leaving many to question whether there is more money to be made in the sector over the coming year.

The answer, according to many analysts, is yes— if you play your cards right. Cybersecurity is likely to remain a major concern for both public and private companies, and the risk of cybercrime will probably continue rising. For that reason, many investors are looking to buy cybersecurity stocks in an effort to beef up their portfolios in the coming year.

Big Names Could Rebound

Well-established firms like Cisco Systems, Inc. (NASDAQ: CSCO) and Symantec Corporation (NASDAQ: SYMC) had poor performances in 2015, losing 3.37 percent and 20.38 percent respectively.

Related Link: Dam Hack Reignites Cybersecurity Fears

However, some analysts are expecting to see recovery in the coming year. Cisco has new direction under CEO Charles Robbins and is expected to grow exponentially in the coming year. The firm also has a strong balance sheet and could return cash to shareholders in the New Year as well.

Cloud Computing

One trend that many are expecting to see continue in the New Year is a shift toward housing company data in the cloud. Firms that migrate their data to the cloud will spend less on infrastructure, which would deteriorate over time, while also shifting their security burden onto cloud computing firms like Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) or Microsoft Corporation (NASDAQ: MSFT).

For that reason, companies like Qualys Inc (NASDAQ: QLYS) that provide cloud security and compliance products could be a good bet. Qualys has consistently beat earnings estimates over the past year, and next year analysts see the firm's EPS growing by 18.58 percent.

Industry Exposure

For many investors, the cybersecurity landscape is difficult to navigate and picking individual stocks is too risky, making industry related ETFs a better choice. PureFunds ISE Cyber Security ETF (NYSE: HACK) is one such ETF that tracks the industry as a whole, including big name firms like Cisco and Verisign, Inc. (NASDAQ: VRSN) as well as smaller, growth oriented firms like FireEye Inc. (NASDAQ: FEYE).

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Posted-In: Charles Robbins cloud computingLong Ideas News Markets Tech Trading Ideas General Best of Benzinga


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