T-Mobile’s Bad Press is Good News for One Industry
Yet another high-profile dilemma for the mobile provider could mean big profits for these stocks.
Turn on your TV, and you’re bound to see a commercial advertising 5G phones and plans.
Flip through the pages of your favorite magazine and you’ll probably see 5G ads there, too.
Go to your favorite site for market news, and there’s a good chance an article about 5G will be in the headlines.
It seems we’ve been talking about 5G and the revolutionary things we’ll be able to do with it for years, but it’s only just now starting to come to fruition.
And investors are clamoring to position themselves in the companies most likely to benefit from the nationwide rollout of 5G networks.
That’s because, according to Allied Market Research, the 5G tech market is projected to grow from $5.53 billion in 2020 to more than $667.9 billion by 2026. That’s an unbelievable 12,500% growth in a short five years.
The world’s top mobile service providers are pouring massive amounts of resources into 5G in an effort to grab up market share while the technology is still in its infancy.
And one of the frontrunners of the 5G race in the U.S. continues to run into major setbacks in its bid to grow its customer base.
And I’m seeing a major profit opportunity developing from the fallout.
Where’s the money?
Earlier this week, it was revealed that hackers recently forced their way into the systems of T-Mobile US, Inc. (TMUS).
The breach, which reportedly affects roughly 48 million customers, resulted in sensitive information such as names, dates of birth, social security numbers, and drivers license information being stolen.
While T-Mobile has assured customers that “no phone numbers, account numbers, passwords, or financial information were compromised,” that does little to calm the fears of both customers and investors.
This is now the fourth and largest data breach of T-Mobile’s systems since the start of 2020. In an industry in which security is one of the most important considerations that customers make when selecting a mobile carrier, T-Mobile’s track record is becoming alarming.
Hackers have moved quickly to offer up the stolen data for sale online, leaving T-Mobile customers that were affected by the breach concerned about the potential for identify fraud.
To quell its customers’ concerns, T-Mobile is taking a massive step to ensure their safety – one that could give a big boost to one cybersecurity firm.
How do I get some?
As part of its effort to mitigate the damage done to nearly half of its customer base, T-Mobile is offering two years of identity theft protection from McAfee Corp. (MCFE) to anyone whose information was stolen.
While it’s unclear how much McAfee stands to make from the deal with T-Mobile, it is a huge foot in the door for up to 48 million new customers for McAfee’s identity theft protection service.
With the increasing frequency of hackers attacking vulnerable systems, a greater importance is being placed on cybersecurity.
With each new high-profile data breach, cybersecurity firms continue to thrive. MCFE could be a great buy right now, with its share price currently sitting around 20% lower than the high it achieved earlier this month, despite an impressive 385% EPS beat on its latest earnings report.
More and more companies looking to secure their customers’ information and avoid the bad press that comes with a data breach will continue to beef up their security systems. And that means sustained revenue growth for the top players in the cybersecurity field.
My other favorite names in the space include FireEye, Inc. (FEYE), CrowdStrike Holdings, Inc. (CRWD), and Fortinet, Inc. (FTNT).
This secret is the key to huge returns
I’ve warned Profit Pregame readers time and again about the need to choose carefully when investing around IPOs. Some can be incredibly lucrative, while others can leave investors holding the bag.
Take DoorDash, Inc. (DASH) for example. Wall Street loved the DoorDash IPO – yet two months later, it was down 2.5%. What you may not have known is that there was a $0.58 stock that was instrumental to DoorDash’s success.
And that stock gained as much as 653% at its peak over the same timeframe.
Or how about GoodRx Holdings, Inc. (GDRX)? Another highly touted IPO, down 16% just eight months after its debut.
But if you had known about another tiny health-care firm, you could have had the chance at its 4,958% gain at its highest point over the same period.
Money Morning’s chief investment strategist, Shah Gilani, has uncovered the key to identifying these small companies that could grow as much as 1,000% or more in as little as a year.
In the Spotlight: China makes data security a state issue
Following a crackdown on some of the country’s biggest tech companies over what it deemed insufficient data protection, the Chinese government has officially made better user data security a requirement for large corporations.
With the passing of two new laws, China is alerting its largest businesses that the security and privacy of their customers data needs to improve.
Investigators have found that companies have routinely violated user agreements when it comes to how their data is used.
The new laws aim to curb the unauthorized use of customer data by requiring that handling of personal information must have clear and reasonable purpose and shall be limited to the “minimum scope necessary to achieve the goals of handling” data.
The laws also dictate when collecting user data is acceptable and set new standards for data protection when data is transferred outside the country.
The move is just the latest in a larger saga in which the Chinese government is clamping down on companies with lax data security. There are huge ramifications for both Chinese tech firms and the cybersecurity industry here, and I will continue to monitor the situation and bring you updates as warranted. Stay tuned.