Another day, another hack, another reason to buy a cybersecurity stock.
Clearly, cybersecurity stocks have been the big winners recently.
This should remain true over the next several years. While the group as a whole might be entering overbought territory in the near-term (a 20% run higher in an exchange-traded fund implies that there have been some really big individual movers recently), any forthcoming weakness in the cybersecurity space should be viewed as a long-term buying opportunity.
With that in mind, here’s a list of three cybersecurity stocks which could be among the biggest winners in this secular growth group.
Top 10 Tech Stocks To Buy For 2019: Evolution Petroleum Corporation, Inc.(EPM)
Like many oil & gas peers, Evolution Petroleum Corp (NYSEAMERICAN:EPM) has rallied of late on the back of higher crude prices. Unlike many of those peers, Evolution has a clean balance sheet – and room for growth.
The company in fact acquired assets primarily in the Permian Basin just this week – using up its cash balance in the process. But net cash still is likely modestly positive, and so far Evolution has made sure to build out its assets using cash flow instead of higher-risk debt.
That strategy has been enough to support a 4%-plus dividend yield – and allow EPM to benefit nicely on the big gains in crude. A joint venture with struggling Denbury Resources Inc.(NYSE:DNR) remains a sticking point, but $70-plus oil could allow both companies to finally improve those operations.
DNR stock has quadrupled since late October and Evolution may see some spillover benefits from its partner’s newfound health.
Top 10 Tech Stocks To Buy For 2019: Teladoc, Inc.(TDOC)
In the future, patients may receive a lot of their primary care via virtual doctor visits facilitated by Teladoc.
In partnership with providers and insurers, patients can use Teladoc’s service to discuss their healthcare concerns with doctors on smartphones or computers. The on-demand nature of virtual visits makes it a great option for time-strapped patients and virtual visits are a win for providers because they’re a good way to fill empty slots in their schedule.
Virtual doctor visits are arguably most appropriate for simple healthcare needs now, but in the future, advances in remote patient monitoring could make them useful in complex healthcare cases, as well. In anticipation of this shift, Teladoc acquired Best Doctors last year.
Best Doctors provides virtual second opinions from top-rated specialists and this acquisition was a big reason why Teladoc’s first-quarter revenue grew 109% year over year to $89.6 million. Best Doctors was an important source of revenue in Q1, but even if you back out its contribution, Teladoc’s sales still grew by 47% in the past year.
Teladoc sees a net loss of between $1.36 to $1.41 this year, but sales are expected to increase to between $350 million to $360 million from $233.3 million in 2017. The losses will likely continue for a while, but the size of the addressable market still makes this a stock worth buying. In Q1, Teladoc had 606,000 doctor visits and that’s only a small fraction of the 991 million times patients visited doctors last year, according to the Centers for Disease Control.
Overall, fast-growing companies tend to be more volatile than slower-growing peers, but over time, investing in high-growth companies like these three can pay off with market-beating returns. Therefore, if you have a long-term time horizon and you’re willing to accept the risk associated with investing in growth stocks, it might be worth buying all three of these for your portfolio.
Top 10 Tech Stocks To Buy For 2019: World Wrestling Entertainment, Inc.(WWE)
Shares of World Wrestling Entertainment gained more than 3.5% and reaching a new all-time high of $41.58 in morning trading today. The sports entertainment giant filed its first quarter fiscal 2018 earnings report on Thursday morning, and investors clearly liked what they saw.
WWE posted adjusted earnings of 18 cents per share, cruising past the Zacks Consensus Estimate of 13 cents and growing 125% from the prior-year period. The company also raised its full-year guidance for adjusted OIBDA to $150 million from $145 million.
WWE is now holding a Zacks Rank #2 (Buy).
Top 10 Tech Stocks To Buy For 2019: Seagate Technology PLC(STX)
At first glance, hard-drive maker Seagate seems like a dividend trap. Its core business of platter-based HDDs (hard disk drives) seems threatened by flash memory-based SSDs (solid state drives). Meanwhile, its 4.4% dividend yield consumed 114% of its earnings over the past 12 months.
However, Seagate’s core HDD business is very resilient. HDDs are much cheaper than SSDs, which makes them ideal for high-capacity data centers. Cyclically high flash memory prices are also making SSDs pricier.
Meanwhile, Seagate developed higher-capacity HDDs to meet the demands of enterprise customers and service providers, which prioritize cost and capacity over raw speed to meet the demands of streaming media and cloud services. Seagate is also launching new hybrid drives, which merge SSDs and HDDs, and HDDs with built-in AI features for security and analytics.
That’s why Seagate finally broke a multiyear streak of revenue declines with 1% sales growth last quarter. Wall Street expects its revenue and earnings to rise 1% this year, and for its earnings — lifted by buybacks — to grow 19%.
Seagate’s dividend looks flimsy based on its payout ratio, but those payments only used up 55% of its free cash flow over the past 12 months. That means Seagate can keep paying its dividend, although it hasn’t hiked that payout since 2015. Seagate isn’t the ideal dividend stock for nervous investors, but misconceptions about its business have made it a cheap income play at 12 times forward earnings.
Top 10 Tech Stocks To Buy For 2019: Oracle Corporation(ORCL)
Oracle (ORCL) shares are down nearly 9% after reporting good quarterly results dragged down by weak forward guidance. Quarterly earnings rose 20% from last year to 83 cents per share on a 5.4% growth in revenue. Cloud revenue increased 32% to $1.6 billion.
So why is the stock down? Because the revenue beat was driven by a lower tax rate. Moreover, during the earnings call, analysts seemed disappointed with cloud revenue and guidance.