The selloff in cybersecurity stocks creates attractive entry points for investors with a longer time horizon. However, the growing risk of a bear-market correction in the first half of 2016 suggests even better buying opportunities could emerge. Investors should remain cautious and plan to ease into any positions.
We take a slight profit in one of our underperforming software picks and roll the proceeds into a name that boasts a highly visible revenue stream, tends to hold its value during periods of volatility and offers exposure to several near- and intermediate-term upside drivers.
Our software picks from last summer have delivered solid gains, easily outperforming the S&P 500 and topping the Russell 2000 Computer Service & Software Index. Here’s our assessment of these companies’ quarterly results and their future growth prospects.
Earlier this summer, we highlighted a two-pronged strategy to profit from the software industry’s transition to a subscription-based model that improves revenue stability and better serves customers. Our approach has paid out thus far, with our picks outperforming their benchmark index; here are our updated takes on these names.
Software-as-a-service stocks emerged some of the hottest, momentum-driven names in 2013--and many of these high flyers crashed to earth earlier this year. But investing in these disruptive technologies doesn’t need to have the same effect on your portfolio. Focus on established names and traditional software companies making the jump to subscription-based models to build wealth over the long haul.
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