Daily Stock Pick: January 31st, 2023

Given the unprecedented situation with major threats Russia and China, Washington is not the only world power taking steps to strengthen the technical capabilities of its military and that of its allies while also seeking to protect the U.S. from cyber threats. Experts project that by 2027, the global network security market will command a valuation of $16.6 billion, representing a CAGR of 23.5% from 2023 estimates.

Long-term-minded investors would do well to include stocks from the segment as governments and businesses worldwide ramp up their efforts against cyber terrorism. But not all companies from the burgeoning subsector are set to last. Online security is a young, quickly evolving industry. Competition is heavy in the space, and demand continues to grow faster in volume and complexity.

As a leader in cybersecurity solutions, today’s featured company is poised to scoop up a significant portion of the whopping 15.6 billion the U.S. is expected to spend on cybersecurity in 2023. Unlike many of its competitors, this ticker is still reasonably priced.

Empire Research:

A company with 400 million ‘patents’

One company has quietly compiled more than 400 million official trade secrets.

Trade secrets are like patents in that they protect valuable and proprietary information…

But unlike patents, trade secrets take less time to register… and more importantly, they never expire.

Which is a huge advantage for this little-known company.

You see, this company is using these trade secrets to build the world’s largest “codebase,” which will bethe key to it becoming “America’s Next Big Monopoly.”

Not surprisingly, Wall Street is starting to take notice. And the smart money is already pouring in.

Tech investor Cathie Wood has invested over $80 million already, and Microsoft founder Bill Gates has invested as well.

Get the details here before this story hits the mainstream media.

Booz Allen Hamilton (BAH) is one of the world’s largest cybersecurity solutions providers. Specializing in marketing cybersecurity products that are produced by other companies, nearly every U.S. federal, intelligence, and defense agency uses its services. In other words, Booz Allen is poised to scoop up a significant portion of the whopping 15.6 billion that the U.S. is expected to spend on cybersecurity in 2023.

For its fiscal 2023 second quarter, which ended September 30, revenue surged 9.16% year over year to $2.3 billion, while its net income jumped an impressive 10.4% to $170.93 million. Booz Allen reported quarterly earnings of $1.25 per share, exceeding Wall Street expectations of $1.13 per share. The company raised its full-year EPS view to $4.24-$4.50 from $4.15 – $4.45. Wall Street expects $4.88 EPS for the entire year, indicating a reasonable forward P/E of 24 times.  

Cowen analyst Cai von Rumohr recently raised the firm’s price target on BAH to $123 from $109 after hosting the company at the London Industrials & Renewables Summit and coming away with a favorable outlook driven by continued demand tailwinds and an easing labor market. 

The current consensus recommendation is to Buy BAH. A median price target of $110 implies a 20% upside. The stock comes along with an attractive 1.66% dividend yield.