Pure Play Cybersecurity Software Stocks Portfolio Down Almost 4% In May

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An Introduction

Corporate spending on cyber security is forecast to grow at a CAGR of 13.8% between now and 2030 (source) and that is expected to have a positive affect on the value of the 7 pure-play stocks in the cyber security category. That being said, however, these 7 stocks are constituents in the new munKNEE Pure Play Cybersecurity Software Stocks Portfolio is off to a slow start in 2024 only going UP 3.3% YTD albeit DOWN 3.6% in May.

What Are Pure Play Companies?

A pure play company concentrates all its efforts on a single line of business, and in this context, it’s cyber security software. Notably, those companies that are highly diversified, i.e., do not generate at least 50% of their sales from cyber security products and services, are excluded from our new Pure-Play Cyber Security Stocks Portfolio of just 7 companies which is replacing our Cyber Security Stocks Portfolio which contained some nonpure play constituents.

The Pure-Play Cyber Security Stocks Portfolio

Below are:

• how the constituents performed in May, in descending order,
• their performances YTD,
• their market capitalizations,
• their current stock prices relative to their forecast earnings in 1-year's time (i.e., PEG ratio) where 1.0 or less means the stock is under-valued and 2.0 or more means the stock is currently over-valued,
• their momentum direction towards an RSI level of 30 (buy) and towards 70 (sell) and
• the most recent news, analyses and commentary on them.

1. Gen Digital (GEN): UP 20.4% in May; UP 8.2% YTD
   • Market Capitalization: $16B
   • PEG Ratio Valuation: 1.11  VERY LOW
   • Momentum Direction and Level: UP @ 71 RSI
   • Most Recent News, Analyses, and Commentary:
     • Gen Delivers Fifth Consecutive Year of Organic Growth and Record Profitability in Fiscal 2024
2. CrowdStrike Holdings (CRWD): UP 3.2% in May; UP 22.9% YTD
   • Market Capitalization: $74B
   • PEG Ratio Valuation: 1.92 LOW
   • Momentum Direction and Level: UP @ 56 RSI
   • Most Recent News, Analyses, and Commentary:
     • CrowdStrike Stock Pops After Beat-And-Raise Quarter
3. Palo Alto Networks (PANW): UP 1.2% in May; No Change YTD
   • Market Capitalization: $94B
   • PEG Ratio Valuation: 2.32
   • Momentum Direction and Level: UP @ 45 RSI
   • Most Recent News, Analyses, and Commentary:
     • Palo Alto Networks Earnings Beat Expectations, Revenue Outlook In Line
4. Check Point Software (CHKP): DOWN 0.5% in May; DOWN 1.5% YTD
   • Market Capitalization: $17B
   • PEG Ratio Valuation: 2.76
   • Momentum Direction and Level: UP @ 26 RSI
   • Most Recent News, Analyses, and Commentary:
     • Check Point's 2024 Report Highlights Urgent Need for AI and Prevention First Security Measures
5. Zscaler (ZS): DOWN 4.0% in May; DOWN 23.3% YTD
   • Market Capitalization: $25B
   • PEG Ratio Valuation: 1.43 LOW
   • Momentum Direction and Level: UP @ 53 RSI
   • Most Recent News, Analyses, and Commentary:
     • Zscaler Reports Third Quarter Fiscal 2024 Financial Results
6. Fortinet (FTNT): DOWN 7.6% in May; UP 1.3% YTD
   • Market Capitalization: $45B
   • PEG Ratio Valuation: 2.41
   • Momentum Direction and Level: UP @ 44 RSI
   • Most Recent News, Analyses, and Commentary:
     • Fortinet's Billings Drag Stock Despite Revenue and Earnings Beat
7. Tenable Holdings (TENB): DOWN 8.3% in May; DOWN 8.4% YTD
   • Market Capitalization: $5B
   • PEG Ratio Valuation: 2.43
   • Momentum Direction and Level: UP @ 32 RSI
   • Most Recent News, Analyses, and Commentary:
     • Tenable Announces First Quarter 2024 Financial Results

Conclusion

On average the above 7 pure play stocks were DOWN 3.6% in May but are still UP 3.3% YTD.

Cybersecurity ETF

Investing in a basket of cyber security stocks is a quick and easy way to get investment portfolio exposure to this critical segment of the tech sector. The Global X Cybersecurity ETF (BUG), for example, consists of 31 stocks and has an expense ratio of 0.51%.

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