Top Performer Report: Internet Security, 11/7

The market has paused its recent upward climb so far on Tuesday, with most major indexes flagging at the time of this writing. The pullback does not appear to be driven by major macro news events, but rather profit taking on a slower news day. Most sectors are falling, with financial stocks leading the way down.

Despite the market headwinds, we focus on a Long Play today as our Top Performer. Internet security stocks continue to perform well as world governments and private firms grapple with digital security issues.

Cyren Ltd  (CYRN): shoots upward on announcing receipt of a major strategic investment.

Cyren is a global internet SaaS Security provider based in Israel. They count companies like Microsoft and Google on their impressive client list, but their stock had flagged in recent years due to earnings trouble.

Yesterday evening, they announced the investment of nearly $20 million by a fund controlled by Warburg Pincus, a leading international private equity group. Pincus will receive stock in compensation (approximately 21% of CYRN). As part of the agreement, Warburg Pincus retains a Special Tender option under Israeli law to acquire up to 75% of the company in the coming weeks.

This indication of serious backing by a sophisticated private equity group sent the stock moving up on heavy volume. Investors bought CYRN to the tune of 40%+ gains. Warburg Pincus believes cloud security represents a massive growth opportunity. These gains represent a welcome respite for CYRN’s stock, which had been struggling for the past two years.

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