The First Trust Nasdaq CEA Cybersecurity ETF (CIBR, Financial) is a specialized fund, or exchange-traded fund, that tracks the value of companies that are classified by the Consumer Technology Association as cybersecurity companies. The specialized fund is made up of companies operating in the software and networking industries as well as other industries like defense and aerospace.
The ETF is stands out because of its diversified portfolio of companies and the weighting techniques used. It weighs holdings by liquidity and caps the weighting of the securities of the five most liquid companies at 6%.
| CIBR | |
| Market Cap | -- |
| Previous Close | $53.22 |
| EPS (ttm) | -- |
| Volume | 1.23 million |
| Average Volume | 1.41 million |
| Shares outstanding | -- |
| 52-week high | $56.58 |
| 52-week low | $41.40 |
TradingView chart at March 29, 2022.
Currently trading at $53.70, the ETF performs well on the stock market, but for those who want a stronger return not weighed down by underperformers in the fund, here are four individual cybersecurity companies that are earning the attention of analysts and investors for outperforming the ETF. The chart below shows the performance of the Cybersecurity ETF and Palo Alto Networks Inc. (PANW, Financial), Hub Security, Nice Ltd. (NICE, Financial) and Check Point Software Technologies Ltd. (CHKP, Financial). All four of these stocks have outperformed the ETF over the past 12 months and, with the exception of Nice (which is down this month), continue to do so.
TradingView chart on March 31.
Palo Alto Networks
Palo Alto (PANW, Financial) is listed as the third-best-performing stock within the ETF. The stock recently surpassed the average analyst 12-month target price of $609.03. Analysts predict the target price will be revalued higher and that shares of Palo Alto Network will continue increasing in value toward the new target price of $629.42.
The company has 8.1 million shares in the U.S. ETF market. First Trust Nasdaq Cybersecurity is currently the top-performing ETF that holds the stock, but Palo Alto outperforms the fund.
| PANW | |
| Market Cap | $60.72 billion |
| Previous Close | $625.25 |
| EPS (ttm) | $-4.74 |
| Volume | 2.51 million |
| Average Volume | 2.23 million |
| Shares outstanding | $248.49 million |
| 52-week high | $1.65 |
| 52-week low | 35 cents |
The stock is currently valued at $625.25, with 94.48 million shares outstanding. Fourteen analysts recommend the stock as a strong buy, while 23 other analysts consider the stock a buy.
TradingView chart on March 29.
Check Point Software Technologies
Check Point Software Technologies (CHKP, Financial) is a holding in 82 U.S.-traded ETFs and has close to 5.2 million shares in the U.S. ETF market. The stock was given a target price of $133.18 target price from brokerage analysts. CIBR is also the best-performing ETF for Check Point, but again, the stock outperforms the fund.
| CHKP | |
| Market Cap | $18.49 billion |
| Previous Close | $138.37 |
| EPS (ttm) | $6.1 |
| Volume | 1.45 million |
| Average Volume | 1.71 million |
| Shares outstanding | 132.80 million |
| 52-week high | $149.62 |
| 52-week low | $107.85 |
Shares of Check Point are currently trading at $139.23. Seven brokerages have rated the stock as a buy, which brings analysts’ recommendations to an average rating of hold.
TradingView chart as of March 29.
The average 12-month target price for shares of Check Point Software has been updated to $132.92. The 52-week range of the stock is $107.85 to $149.62.
Nice
Nice (NICE, Financial) is a cybersecurity and technology system company out of Israel. The company’s stock was outperforming the ETF until earlier this March and is expected to continue that trend soon. The 12-month target price for Nice shares is set at $327.22 by analysts.
| NICE | |
| Market Cap | $14.10 billion |
| Open | $227.76 |
| EPS (ttm) | $2.97 |
| Volume | 384.74 million |
| Average Volume | 307,680 |
| Shares outstanding | 63.12 million |
| 52-week high | $319.88 |
| 52-week low | $199.32 |
The current share value of Nice is $224.70, which sits at the low end of the 52-week range. The stock shows a three-year earnings per share growth rate of $6.44, which indicates growth potential for investors.
TradingView chart on March 29.
Hub Security
HUB Security (XTAE:HUB, Financial) develops confidential computing cybersecurity solutions and associated services. Earlier this month, the company announced it had agreed to be acquired by special purpose acquisition company Mount Rainier Acquisition Corp. (RNER, Financial). The $1.3 billion deal is expected to be finalized in the third quarter of 2022 and will position Hub Security as an industry leader. The company will be listed on the Nasdaq under the ticker “HUBC.”
The company has performed well on the Tel Aviv Stock Exchange. Hub Security shares have been volatile with a 52-week range of $281.10 to $929.90. The volatility of the stock has encouraged investors on the potential upswing of the stock value.
| HUB | |
| Market Cap | $14.942 million |
| Open | $460 |
| EPS (ttm) | 19 cents |
| Volume | 2.68 million |
| Average Volume | 703,000 |
| 52-week high | $281.10 |
| 52-week low | $929.90 |
Hub Security is succeeding in a rapidly growing market of cybersecurity, which is expected to reach $54 billion by 2026. Revenue at the company continues to increase year after year. The strategic acquisition with Mount Rainier will expedite growth for Hub Security. The company's expected growth and the 2022 acquisition increase its investment potential. Share values have consistently increased throughout the month of March, so continuous upside movement is likely.
TradingView chart on March 29.
Bottom line
The Cybersecurity ETF is a specialized fund which offers investors a group of companies within the cybersecurity industry. The fund’s market value and activity differ from the individual companies within the fund.
Palo Alto and Check Point Software are included in the fund, but their performance beat that of CIBR. Hub Security also exceeds the performance of the ETF. SPAC deals, like that of Hub Security, have the power to influence market value in a positive direction. As the deal is executed, Hub may have the strongest upside potential of the four. Nice is currently underperforming, but is a value buy at the current price and is expected to beat the ETF again soon.
