The Motley Fool

Get rich fighting crime

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Figures released by the UK’s Office for National Statistics suggest one in 10 of us have been victims of cybercrime in the past year. In 2015/16, a staggering 5.8m incidents of online fraud and virus attacks were reported, far more than previously estimated (3.8m).

But we’re not the only ones at risk. Just a few days ago, the Greater London Authority Conservatives estimated that cybercrime costs businesses£35bn a year in the capital alone. Recent high profile hacks involving accounting software developer Sage and broadband provider TalkTalk appear to highlight how some companies are still lagging far behind others when it comes to protecting their staff, customers and ultimately, their profit margins.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Based on the above, we can be fairly sure that the need for improved security measures will grow exponentially for years, making it an attractive, long-term investment proposition. Here are some companies that may be worth investigating further.

Key players

Manchester-based NCC (LSE: NCC) is one of the leaders in the fight against cybercrime and a star player with consistent year-on-year revenue and earnings per share growth allowing for regular double-digit increases to the dividend (although admittedly, the yield remains small at 1.4%).

Unfortunately for prospective investors, quality rarely comes cheap. On a forecast price-to-earnings (P/E) ratio of just under 25, it will cost to add NCC to your portfolio. Then again, given its growth potential, this valuation could still be regarded as reasonable.

Despite having produced anti-virus software and encryption products for the last 30 years, Sophos (LSE: SOPH) is a relatively new arrival on the stock market. It’s likely to be an immediate beneficiary of more and more medium-sized businesses building their online presence and requiring increased security. Since listing a year ago, shares have dipped to a low of 175p following higher operating losses being reported compared to the previous year. Having rebounded to 255p today, investors will be looking for better numbers when the company releases interim results in November.

Perhaps one of the less obvious choices for riding this theme is £18bn cap BAE Systems (LSE: BAE). The company may be best known for building submarines and aircraft but it also has a rapidly growing cybersecurity division. Despite performing well since the EU referendum result (with its share price rising from 480p on 24 June to 550p today), BAE remains on a fairly attractive forecast P/E of just over 13. A well covered (for now) dividend yield of 3.8% should also appeal to income investors. Nevertheless, those interested in the company may wish to dig further given its massive pension deficit and the recent disposal of its shares by star fund manager Neil Woodford.

If in doubt, diversify

To mitigate company-specific risk, you could buy shares in all of the above. However, there’s a simpler, more cost-effective solution.

Yesterday, I commented on the many attractions of exchange traded funds, particularly for those just starting out in investment. Thanks to a surge in interest, the UK now has its first fund in this area, offered by ETF Securities  (LSE: ISPY). Although the annual fee is relatively high (0.75%) when compared to one tracking the FTSE 100, this may be a price worth paying given the diversification on offer, lack of alternatives and the possibility of smaller constituents becoming takeover targets, thus providing even better returns for risk-tolerant investors.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Paul Summers owns shares in ETFS ISE Cyber Security GO UCITS ETF. The Motley Fool UK owns shares of NCC. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.