There's an elephant in the room, and it's getting bigger. Even worse, it has your passwords, cautions Sean Brodrick, growth stock specialist and editor of Wealth Wave.
Cybercrime is exploding. Its global cost is expected to eclipse $10.5 trillion per year by 2025, ballooning from $6 trillion in 2021 and $3 trillion 10 years ago. The cybersecurity industry's recently slid under the radar as technology stocks pulled back, but its prospects are compelling. Companies and governments are spending hundreds of billions of dollars to combat the issue.
Cybersecurity Ventures estimates that cumulative spending to fight cybercrime will eclipse $300 billion this year and increase 52% to $459 billion by 2025. The total market size is forecast to grow at a 14% compounded annual growth rate (CAGR) between 2022 and 2027. It tallied $133 billion in 2021.
One of my favorite ways to play this trend is the First Trust NASDAQ Cybersecurity ETF (CIBR). It's the largest and most liquid cybersecurity exchange-traded fund available. CIBR focuses on companies engaged in building and maintaining security protocols for networks, computers and other devices to protect operations.
To be included in the fund, a company must have a market capitalization above $250 million, an average three-month dollar trading volume above $1 million and a free float above 20%.
This ETF manages $5.2 billion in assets across 41 total holdings. The fund's top three positions are Cisco Systems (CSCO), Palo Alto Networks (PANW) and CrowdStrike Holdings (CRWD). They make up about 18% of the fund.
CIBR's expense ratio is a manageable 0.60%, and its trades with an average volume of about 1.5 million shares. Now, let's look at CIBR's daily chart. Where others see disaster, I see opportunity:
CIBR was recently caught up in the big market puke that saw stocks of all types — good, bad and ugly — sell off. But this is an industry projected to see 14% CAGR in revenues! In other words, CIBR holds great companies trading at deep discounts.
Man, oh man, does this sell-off scream opportunity to me. Russians and other cybercrooks are coming for your data … your security … your money! Here's a way you can fight back — and pocket a nice profit of your own.
Make sure to conduct your own independent research. With strong momentum backing the biggest players in cybersecurity, these stocks could be getting ready to rocket higher on the next upswing.
