Monthly newsletter September 2020

September was generally a weak month on the world's stock exchanges. Security shares was no exception, but a stronger dollar and a weaker krona contributed positively. The Global Security Fund retreated by 0.7 percent and 0.5 percent for the R and S classes, respectively.

Crowdstrike was again again the month's best performing share with an increase of around 13 percent. With more and more employees working from home, companies today are more exposed to various types of cybercrime. In this context, Crowdstrike has been a clear winner in an industry that Grand View Research has predicted will grow by 10 percent annually until 2027. Crowdstrike has succeeded in differentiating itself in an extremely competitiveexposed industry with its unique AI and cloud-based Falcon platform. There are different segments in the cyber security field and Crowdstrike is considered to be disruptive in the endpoint protection segment – a segment that the company estimates at $12.8 billion, corresponding to barely a tenth of the entire cyber security sector.

 

The importance of endpoint security has grown since COVID-19, as every employee's laptop and mobile devices are considered an endpoint. Crowdstrike reported an 89 percent increase in subscription growth last quarter which is a evidence that deras advanced solution is more critical for customers than ever. Crowdstrike also bought Preempt Security in September for USD 96 million to enter the identity security market. The company is up over 165 percent during the year and as the fund's largest holding, the company contributed 1.5 percent for the month.

 

Kongsberg Gruppen was up 4.3 percent during September. The company has one well diversified business and a strong cash flow. Also informed the company about a collaboration with Microsoft to explore new ways to make satellite data more accessible via Microsoft's Azure Orbital platform. Microsoft, which last year won the lucrative JEDI contract, works with a number of security and satellite companies.

 

Saab step 1.7 percent during September. The stock has stabilized at a higher level  after the strong rise in July. Together with many other security companies work Saab actively in India to win defense contracts and the company has spoken cautiously positively about possible cooperation opportunities with India. Other security companies that developed positively during the month were Honeywell, Leidos, Lockheed Martin and Flir.

 

Another company that joined Microsoft's Azure Orbital ecosystem was, the satellite communications and networking company Viasat. But newsn if the cooperation was not enough for one positive coursedevelopment. The company was the month's worst performer and retreated 10.3 percent. Cyber security company NortonLifeLock was the month's second worst contributor, down 8.1 percent. The company's share price is in consolidation after a strong year where the share price is up 38.3 percent. There were many companies that contributed to the negative development during the month, among these CACI, Textron and Northrop Grumman were noticed.

 

Boeing announced that production of its 787 airplanes will move to South Carolina next year. A series of strategic cost cuts coupled with a turning point in the current subdued airline industry could well be the tipping point for the airline's share price.

 

The cyber security company Palantir was launched on the stock exchange on September 29th and is valued at roughly USD 15.5 billion. With high-profile investors like Peter Thiel and customers like the CIA, there are high expectations that the company will play a significant role in the cyber security industry in the coming years. The Global Security fund has not bought into Palantir yet, but is monitoring the company.