Buying Fortinet

The Fortinet review article just went up recently and as members can see, the stock already trades well below the fair value estimate. Accordingly, it looks like a great option to add to our portfolio right away! It has been added to the Buy List at its close price today.

That makes 2 cybersecurity stocks in the first 4 added to the portfolio. The sector is ripe for investment right now, in my opinion. It is enormous ($200 billion!), mission-critical for enterprises, risky to migrate once established (creating switching costs), and is largely recession-proof. It also supports strong pricing power. All of this has led to some really fantastic businesses in the space. In the Green Screens alone right now, we have the start of a Cyber ETF. Look at all these names!

• Fortinet (FTNT)
• CrowdStrike (CRWD)
• A10 Networks (ATEN)
• Palo Alto Networks (PANW)
• Qualys (QLYS)
• Tenable (TENB)
• Zscaler (ZS)

Out of that group, I felt that Fortinet and CrowdStrike represented the best combination of great business qualities, founder leadership, and reasonable valuation vs. their prospects at this point in time.

I also like Zscaler quite a bit, but the valuation isn't quite there yet with that one. It might find its way into the Watch List in time.