Okay, I’ve got some good news and some bad news. Bad news first: The U.S. government was hacked, and as many as 4 million current and former government workers may have had their personal information stolen.
The good news? The eternal hunt for the best stocks to buy just became a whole lot easier.
That’s because the cybersecurity industry is more primed than ever to thrive in an age when nothing is sacred and your information is constantly at risk of being stolen.
Stocks to Buy: Palo Alto Networks
In terms of recent returns, it doesn’t get much better than Palo Alto Networks. The PANW stock price has jumped more than 120% in the past year, and, as InvestorPlace’s Jeff Reeves points out, it’s being driven by some pretty compelling metrics:
“There’s good reason for that performance, as PANW stock finished fiscal 2012 with $255 million in revenue and is forecast to hit about $880 million in revenue this year — almost 250% growth.”
Unfortunately, like its peer FireEye (FEYE), PANW isn’t profitable. Still, I wouldn’t be surprised to see this company bought out sometime in the near future by a larger tech company trying to gain more exposure to the industry.
Are you paying attention, Cisco (CSCO)?
Stocks to Buy: Fortinet
Last but certainly not least, FTNT stock is another great cybersecurity stock to buy. The stock is up more than 75% in the past year and — hooray! — the company actually manages to turn a profit.
Driven by its flagship FortiGate line of network security services, Fortinet courts enterprise and government clients alike. A subscription-driven model means recurring revenue as long as FTNT can execute. To date, execution hasn’t been a problem. As I said after Fortinet’s blowout first-quarter, FTNT is the best pure-play cybersecurity stock to buy today. The results speak for themselves:
“Revenue breezed past expectations, coming in at $212.9 million, easily topping $205.2 million estimates. Earnings per share of 8 cents also beat the 6 cents Wall Street was expecting.”
As a profitable company with more than $800 million in cash on its balance sheet, FTNT is certainly the most fundamentally sound of the two options. But for investors seeking a more diversified exposure to the area, there’s also an ETF, which aptly trades under the symbol HACK. The ISE Cyber Securty ETF (HACK) holds a diversified basket of stocks in the area, but it just doesn’t give you the upside offered by the best-in-class names above.
A new age of cybercrime is upon us. We might as well enjoy some upside.
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