Cybersecurity is more critical than ever, especially in a world already reeling from supply disruptions and bottlenecks caused by the coronavirus pandemic. The latest big ransomware attack, against Colonial Pipeline Co., is an eye-opener, as it has led to the shutdown of the 5,500-mile Colonial Pipeline system and could push up gasoline prices.
Beyond COVID-19, we are all threatened with the loss of personal data security as hackers continue to come up with new ways to exploit networks, software and the array of evolving technology services.
Below is a screen of 20 cybersecurity companies that Wall Street analysts like for big gains in the stock market over the next year.
Cybersecurity ETFs
Many information technology companies offer various services that may or may not include software or hardware meant to improve network security. There is no obvious industry group for a broad stock screen.
To screen for a list of favored cybersecurity/network security/internet security stocks, we began by listing all the stocks held by four large exchange-traded funds:
As far as the low ratings from Morningstar for CIBR and HACK, these funds have not been terrible performers over the past three years, but they have underperformed the SPDR S&P 500 ETF
SPY,
Cybersecurity stock screen
Adding the four funds’ holdings and removing duplicates leaves a list of 56 stocks that are covered by at least five analysts polled by FactSet and have stock-market capitalizations of at least $1 billion.
Here are the 20 with majority “buy “or equivalent ratings that have the highest implied 12-month upside potential based on consensus price targets. You will need to scroll the table to see all the data:
(FactSet)
Three of these stocks are especially popular with MarketWatch readers, based on traffic flow to their quote pages. All three have pulled back this year after incredible returns during 2020:
As always, a screen only highlights favored stocks. You should do your own research to form your own opinion about any investment before jumping in.