What happened
Trading on the stock market Tuesday was weak and uninspired, unless you happened to be transacting in CrowdStrike Holdings (CRWD -1.82%). The cybersecurity specialist's shares rose by more than 3% on the day, in contrast to the slumping S&P 500 index, after they were tapped for inclusion on an analyst's hot list.
So what
Following meetings with nearly 20 security vendors at last week's annual RSA industry conference, Jefferies analyst Brent Thill wrote a new research note on cybersecurity stocks.
According to him, security continues to be a major concern among companies and is poised to rise as threats seem to be prevalent. To some degree, however, this is mitigated by concerns about the wider economy and its effects on budgets.
Thill concluded that the cybersecurity-solutions providers best positioned to benefit from this are the ones that offer relatively low-priced products with high returns on investment, and named a set of them as potentially choice stock picks.
Now what
Fortunately for CrowdStrike shareholders, their company was one of those selected. The company joined a rather distinguished list of well-reputed operators and incumbents in the space, including ever-competitive Microsoft, Varonis Systems, and Palo Alto Networks.
Thill's note was a good shot in the arm for CrowdStrike stock, which has lately been punished largely because it is a specialty tech company. Investors have been shunning the sector lately, although this is due more to macroeconomic worries than individual struggles with fundamentals. On the latter basis, CrowdStrike is on very firm ground, and the Jefferies analyst's new note reflects that.
