A No-Brainer Buying Opportunity for 2023

Between Russian President Vladimir Putin’s invasion of Ukraine and China’s constant saber-rattling over Taiwan, a war between the world’s great powers is on people’s minds in a way we haven’t seen since 1939.

But this new war won’t just involve tanks pouring over borders and bombers flying overhead…

For the first time, cyberspace will be a major front in war. And it may be already. We could be seeing the opening salvos of the next world war being fired in cyberspace.

Remember the Colonial Pipeline cyberattack in May 2021? A group of hackers took control of a major oil pipeline in the American South and held it ransom, causing fuel shortages and flight cancellations.

The company had to pay $4.4 million to get its network back up. The FBI got involved, and as usual, there was no way of knowing just where the attack came from…

But I can think of a few countries that might have an interest in showing the U.S. they can cripple its energy infrastructure with a keyboard rather than a bomb.

In February 2021, hackers took control of the water supply of Oldsmar, a town in Florida, and raised the amount of lye in the water to dangerous levels.

More recently, there was the computer error that grounded flights across the country. We know it was a system outage at the Federal Aviation Administration.

But the cause of the outage is under investigation, and it would not surprise me at all if it was a cyberattack.

Everything from the U.S. government to the American businesses that keep the modern economy moving are under threat, and our military is woefully underprepared to fight on this new digital front line.

Luckily, the U.S. is not without a defense from malicious hackers, whether they’re independent or funded by hostile governments…

A Digital Sword, a Digital Shield…

Based in Austin, Texas, CrowdStrike Holdings (Nasdaq: CRWD) is a leading cybersecurity provider.

It offers cloud-delivered protection that includes threat intelligence; IT operations management; identity, workload and data protection; and log management.

Today we live in a global society of universal connectivity. In countless ways, this has made our lives simpler, easier and more productive…

But it has also provided adversaries with a rich group of targets to extort and exploit. Private hackers, foreign cyberwarfare efforts, troublemakers who are just in it for fun… the World Wide Web is deep and teeming with the lot of them.

They have put the world’s technological framework under assault every day, from theft to consumer data breaches to ransomware attacks. And that framework is much flimsier than most people would like to believe…

Our enemies – the current generation of cybercriminals and cybersoldiers – are organized, motivated and well funded, probing weaknesses and infiltrating systems at tremendous speed and scale.

Malicious cyberactivity costs the U.S. economy hundreds of billions of dollars a year. And no government, business, industry or individual is ever immune to hackers – regardless of their motivations.

The Pentagon has traditionally outlined four domains of potential conflict: land, air, sea and space. But it recently outlined a fifth domain: cyber.

Huge problems create enormous business opportunities. Cybersecurity is a case in point.

CrowdStrike’s patented Falcon platform gives organizations the flexibility they need to eliminate security risks and ensure compliance across the cloud.

It is widely viewed as the industry’s most complete External Attack Surface Management technology.

CrowdStrike is ranked No. 1 by customers of endpoint detection and response, standing head and shoulders above the competition in both market presence and customer satisfaction. The company’s bottom line makes that clear…

Sales at CrowdStrike are growing at a 53% annual rate, and annual recurring revenue is growing by 54%, topping $2.34 billion in 2022.

CrowdStrike has operating profits of $90 million and free cash flow topping $174 million. It has 21,146 subscribers the world over, including 537 of the Forbes Global 2000 companies, 69 of the Fortune 100, 258 of the Fortune 500 and 15 of the top 20 U.S. banks.

It should come as no surprise, then, that the firm has beaten Wall Street’s consensus earnings estimate by an average of 37% over the last four quarters.

I estimate that earnings will rise from $1.50 a share this year to approximately $2.30 next year.

And that may prove too conservative. At least, Director Roxanne Austin seems to think so.

She purchased 60,000 shares of CrowdStrike over the last three weeks at up to $100.03 a share, an investment of more than $5.8 million.

Austin is a sophisticated investor who has served as president of Austin Investment Advisors, a private investment and consulting firm, and currently serves on the boards of AbbVie, Abbott Laboratories and Verizon.

With all her knowledge, including material, nonpublic information about the future prospects of CrowdStrike, she clearly feels that the stock is undervalued.

In short, this is a well-managed, fast-growing cybersecurity provider with excellent upside potential… and telltale insider buying.

No wonder the average price target on the Street is $189 a share, a forecast upside of 85% from the 39 analysts who follow CrowdStrike.

Action to Take: Buy CrowdStrike Holdings (Nasdaq: CRWD) at market. And use a 25% trailing stop to protect your principal and your profits.

Waging War on Sea, Land, Air and the Digital Frontier

Cyberspace is much, much bigger than you likely think…

I want you to think of every website you visit on a daily basis… Google, Wikipedia, Facebook, YouTube, whatever else.

That’s all on the visible internet. All of the visible internet, the sites you can access with any browser, represents only about 3% of the entire internet.

The other 97% of the internet is the deep web, or the dark web. That’s all the rest of cyberspace.

Most of it is reams of corporate and government data, private servers and the like. It’s also where cyberwarfare divisions of national militaries operate, along with cybercriminals buying and selling everything from drugs to illegal guns to people.

For a company, venturing out into the internet without protection is asking to be robbed. Government systems are also vulnerable to all the digital ne’er-do-wells lurking in both the visible internet and its deep, dark depths for their next opportunity.

CrowdStrike is at the forefront of protecting America’s economic infrastructure from said ne’er-do-wells. And it’s so good at it that its name is the first that many companies think of when they’re looking to beef up their cybersecurity.

It ought to be the first you think of when you’re ready to make your next investment.