In August, the Canada Revenue Agency was forced to temporarily shut down its online services. This came after the agency revealed that it was hit by two cyber attacks that compromised thousands of accounts linked to its services. On August 14, the CRA said that about 5,500 accounts had been affected by the attacks. This is yet another example of a cyber attack that has impacted a major public or private institution. Because of this, millennials should look to invest in the promising cybersecurity space.
Why cybersecurity is perfect for millennials
Investment in cybersecurity is expected to soar over the next decade. Public and private institutions are looking to avoid damaging incidents like what occurred at the Canada Revenue Agency. Equifax, one of the three largest consumer credit reporting agencies in North America, suffered a major data breach from May to July 2017. This cyber attack impacted more than 140 million consumers and has cost the organization hundreds of millions in damages.
Back in February, I’d discussed how beginners should look to invest in cyber security. This is also a solid blueprint for millennials. ResearchAndMarkets recently projected that the global cybersecurity market is expected to grow from $149 billion in 2019 to $208 billion in 2023. This would represent a CAGR of 11% over the forecast period.
Millennials can position themselves for big gains by investing in this sector. Below are some of my top options in this space.
Two stocks to target in this sector
BlackBerry was a Canadian giant in the smartphone space that has transitioned into software over the past decade. It is fighting to regain its old prestige, but the company has managed to carve out a strong footprint in the cybersecurity sector. This was bolstered by its acquisition of Cylance in early 2019.
The Waterloo-based technology company offers full-service cybersecurity consulting. Moreover, it has won major contracts with organizations in the public and private sphere due to its superior endpoint security. Shares of Blackberry have dropped 18% in 2020 as of close on September 3. Millennials need to have patience to ride with Blackberry, but this TSX stock could still boast huge rewards by the end of this decade.
On the other hand, Absolute Software stock has soared 87% so far this year. Its stock is up 110% year over year. This company specializes in endpoint security and data risk management solutions. In fiscal 2020, Absolute Software reported revenue growth of 6% to $100.5 million. Meanwhile, net income increased 40% to $10.6 million. Millennials should feel good about adding this top cybersecurity stock before 2020 comes to an end.
Millennials: Take a broad approach to cybersecurity investing
Instead of focusing on individual TSX stocks, millennials can take a broad investment approach to the cybersecurity space. The Evolve Cyber Security ETF (TSX:CYBR) seeks to replicate the performance of the Solactive Global Cyber Security Index Canadian Dollar Hedged. This ETF rose 25% in 2019 and it has increased 35% so far in 2020. Some of the top holdings in this ETF include Zscaler, Crowdstrike Holdings, and Check Point Software.
