According to Global Market Insights, the cybersecurity industry will grow at an average of 12% per year. The sector could reach $400 billion by 2026. The emergence of cloud and edge computing created a new sector of cybersecurity stocks.However, the new "work from anywhere" culture has caused companies to accelerate their investment in cybersecurity. There is growing evidence that a significant percentage of the workforce will continue to work from home. This bodes well for cybersecurity stocks, many of which use a software as a service (SaaS) model.Another catalyst is the emerging 5G infrastructure that raises additional concerns about connected devices adding strain to cybersecurity measures. In response to a question from InvestorPlace, Braden Allenby, President's Professor and Lincoln Professor of Engineering and Ethics at the Ira A. Fulton Schools of Engineering at Arizona State University, wrote, "5G may well be an important enabling technology for the … Internet of Things (IoT), which will deploy literally billions of sensors, processors, and chips across global systems."InvestorPlace – Stock Market News, Stock Advice & Trading TipsMore devices mean more threats. Says Allenby, "these data and assets can in turn be suborned for any number of purposes, from feeding neural net AI at scale, to forming massive bot armies that can then be used for nefarious purposes."Adding to this dilemma is the increased volume of data. As Allenby said, there is now an independent data economy: "Data have independent value, and all things (being) equal, the tech firm that has the most data has a better chance to win the AI (artificial intelligence) race."With that in mind, here are six cybersecurity stocks to buy that take advantage of this growing trend. * 7 Hotel Stocks to Buy Before Vacationing Restarts * Palo Alto Networks (NYSE:PANW) * Zscaler (NASDAQ:ZS) * CrowdStrike (NASDAQ:CRWD) * Qualys (NASDAQ:QLYS) * Splunk (NASDAQ:SPLK) * Okta (NASDAQ:OKTA) Palo Alto Networks (PANW)Source: Sundry Photography / Shutterstock.com Like most of the cybersecurity stocks on this list, Palo Alto Networks is benefiting from the surge of employees who are now working from home. PANW stock is up nearly 20% in the last month. The company delivered an earnings report that soundly beat analysts' expectations. But what was more important than the quarterly results was the forward guidance.The earnings report made clear that the company is benefiting from the mitigation efforts caused by the Covid-19 pandemic. With that trend likely to continue to at least some extent, that should be a catalyst for this cybersecurity stock.Palo Alto is an example of a company that has successfully pivoted from a firewall model to cloud-based cybersecurity products such as GlobalProtect and Prisma Access. And the company also uses a software-as-a-service (SaaS) model that investors love because it means recurring, predictable revenue.In a statement that accompanied the company's earnings report, CEO Nikesh Arora said the transition that is occurring due to the Covid-19 pandemic could last up to 18 months. "We believe this will prompt key trends to accelerate, including remote working models, shift to the cloud, and focus on AI/ML and automation to drive effective cybersecurity outcomes." Zscaler (ZS)Source: Sundry Photography / Shutterstock.com Zscaler is another of the cybersecurity stocks that is benefiting from the work-from-home movement. ZS stock is up over 115% in 2020. Zscaler uses a cloud-native platform to provide secure web gateways help users access any application from anywhere on any device.Zscaler's signature product is its Private Access (ZPA) product that allows users to incorporate applications without network access. In its most recent quarter, the company had a 10% gain in ZPA usage mostly propelled by the needs of companies to connect remote workers. Zscaler posted a 40% year-over-year (YoY) increase in billings at $110.5 million. And in the all-important category of billings, Zscaler also posted an increase of 55% or $131.3 million.Partnerships are a key part of Zscaler's business model. The company was recognized as a finalist in two Microsoft (NASDAQ:MSFT) Security 2020 Partner Awards. "Office 365 and Azure adoption remain long-term tailwinds for Zscaler," said Needham analysts Alex Henderson. "Zscaler continues to train Microsoft professionals on their solution and is seeing positive traction with the salesforces working together." * 8 Battery Stocks That Will Seriously Power Your Portfolio The company also partners with CrowdStrike and is actively working in tandem with the company to help capture more market share. CrowdStrike (CRWD)Source: Piotr Swat / Shutterstock.com That brings us to CrowdStrike. Whereas Zscaler and other companies like it help secure data, CrowdStrike works to protect the devices that are being used to view the data. This is called endpoint security. According to the Gartner research firm, it's a field that is getting crowded. However, according to Gartner, CrowdStrike is still one of the leaders in this space.CrowdStrike has a high valuation at approximately 34x earnings. However, the company may be getting to ready to zoom higher as Zoom Communications (NASDAQ:ZM) is now using the cybersecurity company in response to concerns over its security problems.CRWD stock has nearly doubled in 2020 and has shrugged off the effects of the pandemic-induced selloff in March. The consensus analysts' price target suggests a 12% decline for the stock. However, the analysts that have issued ratings since May 1 have an average price target of $95, with three out of five analysts having a rating of $95 or higher. Qualys (QLYS)Source: Shutterstock Qualys is one of CrowdStrike's competitors in the endpoint security sector. Qualys signs up enterprise clients on their platform, consolidates their security and compliance stacks which help those clients cut their overall IT spending.QLYS stock is at an all-time high and may look moderately expensive compared to its peers at 46 times forward earnings. However, the company is on an upward trajectory. The company touts its Vulnerability, Management, Detection and Response (VMDR) tool. Rather than having the customer handle its cybersecurity through a bundle of apps, VMDR handles everything as a single app.But what really seems to excite investors at the moment is the company's free cash flow (FCF) of over 40%. This helps offset the company's annual revenue growth that at around 14% is less than some analysts may prefer. * 7 Dental Stocks to Buy for Long-Term Gains And as the economy begins to reopen, Qualys has minimal exposure to three segments (retail, hospitality, and travel) that look like they may lag behind other industries. Splunk (SPLK)Source: Michael Vi / Shutterstock.com At first glance, Splunk doesn't look like it belongs in the category of cybersecurity stocks. Its main function is to help customers analyze data and generate solutions based on that analysis. But that data still needs to be protected, and Splunk has been producing data-driven cybersecurity solutions since 2018. As Luke Lango recently cited, one of Splunk's most notable additions is Slack (NYSE:WORK).That addition makes Splunk a relevant player in the work from home movement, which should be a catalyst for growth in the near future. Despite multiple years of more than 25% in revenue growth, Splunk is not yet profitable. But that shouldn't deter investors. The company is forecasting continued sales growth of over 20% over the next few years. As it does, Splunk's high margins should also increase.By including cybersecurity within its existing portfolio of products, Splunk will be able to hold its own as the cybersecurity sector is likely to undergo consolidation in the near-term. SPLK stock is up over 20% this year and has nearly doubled since the March selloff. Okta (OKTA)Source: Lori Butcher / Shutterstock.com I get excited about OKTA stock because I appreciate the simple elegance of their cybersecurity solution. The limitation of many cloud-based security systems is that they treat the company's entire ecosystem as a fortress. The problem is that if the company's ecosystem is a lock, then its employees are the key. In a world where work-from-home figures to be the new normal, security gets challenging when the lock and the key are separated.That's where Okta comes in. The company has a solution that essentially makes each employee part of the ecosystem. Wherever they go, they carry their security with them. Okta also crushed its last earnings report. OKTA stock is responding accordingly, climbing about 60% in 2020.If there is any question about investing in Okta, it would be a concern that the company gave a rather conservative estimate for full-year revenue after blowing through their first-quarter revenue expectations. In an earnings season where many companies have pulled full-year guidance, I'm willing to give the company a pass. Any recovery will seem to be U-shaped at best, so a more conservative forecast may be for the best.Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019. As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post 6 Cybersecurity Stocks Keeping Your Data Safe appeared first on InvestorPlace.
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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. […]
Shares of DraftKings (NASDAQ:DKNG) have been on a tear since the IPO in late April. DraftKings stock has more than doubled in that time frame. It has benefited from the stay at home orders as bettors no longer could head to the casinos.Source: Lori Butcher/Shutterstock.com Certainly some of the move higher was warranted given the uptick in platform use and the increased likelihood of more states legalizing gambling to bring in much needed revenues. The red-hot rally has now come too far, too fast. Time to cash in your bets on DKNG. Fundamental FocusMatt McCall and the InvestorPlace Research Staff put together an outstanding research report yesterday. They highlighted many reasons to like DraftKings stock going forward, but wouldn't be a buyer at current levels due to valuation concerns. Instead they recommend waiting for a pullback before buying DraftKings stock.InvestorPlace – Stock Market News, Stock Advice & Trading TipsThe average analyst price target is just $38.57, which is below the most recent closing price of $40.53. Susquehanna analyst Joseph Stauff did just up his price target recently to $48, while Cannacord Genuity analysts Michael Graham has a street high $50 price target. Both of these price targets imply limited upside from here for such a volatile stock like DKNG. * 7 Hotel Stocks to Buy Before Vacationing Restarts Technical TakeDraftKings stock has been overbought for a while but is finally starting to lose some steam. 14-day RSI has turned lower after reaching an extreme. MACD is also beginning to weaken. Momentum has finally pulled back somewhat after getting to seriously over-exuberant levels. Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade Most importantly, DKNG stock had a key reversal day after making a new all-time high of $44.79 on Tuesday. Shares opened near the highs but immediately began to pull back. Ultimately DraftKings stock closed sharply lower on the day.This type of price action is many times a reliable signal that the previous trend has come to an end. The buyers have become exhausted and the sellers have taken control. It is even more powerful given the magnitude of the previous rally. Volatility ViewThe options market can provide good insights into the speculative fever surrounding big time momentum stocks. Traders can glean some solid information looking at at the option volume broken down between calls and puts.The table below shows the enormous appetite for call options with 3.4 calls trading for every put. This type of over-exuberance is usually a reliable contrarian indicator that the rally may be getting overextended.Source: The thinkorswim® platform from TD AmeritradeNormally out-of-the-money puts carry a higher implied volatility (IV) than similar out-of-the-money calls. A look at the Apple (NASDAQ:AAPL) option montage shows that the June $310 puts are trading at a 26 IV, while the June $340 calls are trading at just a 21.50 IV. Both options are roughly equidistantly (12.5 points) out of the money. This is typical for most stock options. Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade DKNG options, however, exhibit what is called a reverse skew. The calls carry a much higher IV than the similarly out of the money puts.The June $35 puts are trading at a 92 IV while the June $46 calls are trading at over a 98 IV. Both options are roughly 5.5 points out of the money. This type of option pricing anomaly is rare and invariably a signal that the rush for upside exposure has reached an extreme. Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade The high level of comparative IV also sets up ideally for selling these expensive calls to structure a guardedly bearish trade. So to position for the red-hot rally to stall, a simple bear call spread makes probabilistic sense. Trade IdeaSell the DKNG June $50/$55 call spread for a 50 cents net credit.Maximum gain of the trade is $50 per spread with maximum risk of $450 per spread. Return on risk is 11.11%. The short $50 strike price provides a 23% upside cushion to the $40.53 closing price for DKNG stock. It is also above the upgraded $48 price target from Susquehanna and right at the highest price target of $50.As of this writing, Tim Biggam did not hold a position in any of the aforementioned securities. Anyone interested in finding out more about option-based strategies or for a weekly option and volatility newsletter can visit the Options and Volatility Newsletter website. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post DraftKings Stock Is No Longer a Good Bet at These Prices appeared first on InvestorPlace.