Blancco to thrive…but selling HYVE (SELL ALERT)
23rd June 2022 |
Cyber-attacks remain one of the biggest problems in the global economy.
Globally, around 30,000 websites are penetrated daily by cyber-attacks, with one occurring every 11 seconds on average according to 2021 estimates.
In 2021, the average number of cyber-attacks and data breaches grew 15% on the previous year.
By 2025, it is estimated that cybercrimes will cost the world $10.5 trillion annually.
Before going any further, it’s useful to understand what a cyber-attack is.
A cyber-attack is an unauthorised attempt to gain access to a computer system or network, with the intent to cause harm.
One of the most common forms of cyber-attack is a phishing attack. This is a situation when the attacker tricks the victim into handing over sensitive data such as a password, usually through an email link that pretends to be from a legitimate organisation.
Cyber-attacks can have devastating consequences for organisations.
They can deeply impact their finances, reputation, and customer bases.
Gloucester County Council’s (GCC) recent cyber security incident provides a good example.
In December 2021 its IT systems were compromised, causing delays to benefits payments, planning applications and housing sales, with some people at risk of having mortgage offers rescinded.
GCC also believes personal information on council members may have been obtained.
Six months on, GCC concedes is still some way from getting its services back to normal. GCC estimates the total cost of the attack to be in the “millions.”
With this in mind, you would’ve thought that businesses would be taking cyber security very seriously.
However… it seems many are not.
In fact, the UK government’s Cyber Security Breaches Survey 2022 found that only 43% of businesses have a cyber insurance policy.
In other words, more than half of businesses don’t have incident response measures in place to deal with cyber-attacks.
However, we believe we may soon see an improvement in these numbers.
In March 2022, the UK government proposed new laws that will help boost the UK’s resilience against cyber-attacks.
Under the proposals, the UK is updating and implementing the Network & Information Systems (NIS) regulations. The NIS regulations, which came into force in 2018, provide legal measures to improve the overall level of cybersecurity in the EU.
Notably, the updates include expanding the scope of the NIS regulations. For instance, to third-party vendors who manage IT services on behalf of other organisations.
Another update is requiring firms to provide more frequent, transparent reporting of cyber-attacks to regulators – i.e. even those which have little impact on business operations.
With this in mind, we believe this gives a strong investment case for Blancco Tech Group (LSE: BLTG).
Blancco is a provider of data erasure software services. Its technology clears data from devices without a trace being left behind, putting it out of reach from hackers.
On 8 June 2022, Blancco announced it had completed the acquisition of WipeDrive, a US-based provider of data erasure software solutions, for an undisclosed amount.
According to Blancco, the deal will “enhance its reach” in the United States, whilst also “strengthening its competitive position.”
We’re excited by this deal, as it provides Blancco with the ingredients to develop into the leading, global provider of data erasure software that we’ve envisaged for some time.
We reiterate our ‘BUY’ recommendation on the stock. You can find the original recommendation here. Remember to check the portfolio for the latest advice here.
Buy list update
Immotion Group (LSE: IMMO)
Immotion Group is a provider of virtual reality (VR) and simulations to tourist attractions.
The company is making great commercial progress after the pandemic, with footfall returning to many of its installation locations.
In our 26 May 2022 update, we told you of Immotion’s exciting new commercial deal with Milwaukee County Zoo, which saw Immotion install a 40-seat VR theatre there.
Immotion has just inked another deal.
On 16 June 2022, the company announced a commercial agreement with Chinese VR company Leke VR.
In the deal, Immotion will license its oceanographic VR to Leke, before being installed into an initial 15 aquariums across China.
The installations will total 180 seats, giving exposure to 32 million annual visitors across all sites.
Immotion will receive a licence fee of around 25 pence per use from each location.
The deal with Leke VR is Immotion’s first venture into the Chinese market.
China is home to the largest VR market in the world.
Immotion CEO Martin Higginson stated he was “delighted” with this development, calling it an “excellent way” to enter the Chinese market.
We remain excited by Immotion’s current and future potential in delivering engaging, immersive VR experiences for its customers.
We reiterate our ‘BUY’ recommendation on the stock. You can find the original recommendation here.
Remember to check the portfolio for the latest advice here.
Sell alert: HYVE Group (LSE: HYVE)
HYVE Group connects business shareholders via in-person exhibitions and online events.
HYVE has never really bounced out of the pandemic recovery, with major commercial deals being few and far between, with no clear path to delivering business growth. If it hasn’t seen some return of value by now then it may be an even longer road back than we expected.
We believe the stock could come under more pressure, so we are going to sell this one at a loss of 71.74%, with capital preservation in mind.
Action to take: SELL HYVE Group (LSE: HYVE)
Price recommended at: 244.50GBp
Price sold at: 69.10GBp
Gain/loss: – 71.74%
The Frontier Tech Investor “Top Three”
Sometimes it’s hard to decide on which stocks to invest in from our buy list.
Below is our Frontier Tech Investor “Top Three” section showing three stocks in open BUY positions. If you’re trying to figure out what to invest in next, these are three that we think are a great place to start.
This doesn’t mean our other stocks are no good: this is just a tool to help you spot the next Frontier Tech Investor stock that could be worthy of your consideration.
Volex (LSE: VLX) – Volex is a global manufacturer of power and connectivity products. This includes power cables, fibre optics and charging plugs. It might sound a little basic, but these are critical mechanisms which are powering some of the key technologies of the modern day. These technologies include electric vehicles (EVs), artificial intelligence (AI) and big data networks. Volex has huge credibility behind it, particularly as it does business with some of most widely recognised companies in the world, including Tesla. You can find the original recommendation here.
Team17 (LSE: TM17) – Team17 is a video game publisher. It has a large collection of games which contains some of the most popular in the gaming world. One of these is Worms, the enthralling last-man-standing survival game born out of the nineties gaming boom. Team17 is keeping up with the times and offers its games across a number of contemporary technology platforms. It has even flirted with the idea of non-fungible tokens (NFTs), a megatrend which could revolutionise the gaming industry. At a time where sceptics think online gaming will come off the boil following the ease of lockdown restrictions, Team17 keeps gamers coming back for more. You can find the original recommendation here.
AB Dynamics (LSE: ABDP) – AB Dynamics is a provider of automotive testing services. The automotive industry is undergoing rapid transformational change, heading for an electric and autonomous future. This brings an ever-changing regulatory landscape, with automotive manufacturers needing to ensure they adhere to the latest safety standards. AB Dynamics testing services are helping to make arduous, chaotic testing periods more seamless than ever before, ensuring that the vehicles of tomorrow are fit for our roads. You can find the original recommendation here.
Sam Volkering
Editor, Frontier Tech Investor
Elliott Playle
Analyst, Frontier Tech Investor
