In this article we discuss the 5 Best SaaS stocks to buy and hold for long term profits. If you want to read our detailed analysis of these stocks, go directly to the 10 Best SaaS Stocks to Buy and Hold for Long Term Profits.
Best SaaS Stocks to Buy
5. Zscaler, Inc. (NASDAQ: ZS)
Number of Hedge Fund Holders: 34
Zscaler, Inc. (NASDAQ: ZS) makes it to the list of the best SaaS stocks to buy for long-term profits because the company’s Cloud products offer internet security and authentication solutions that are seeing a huge demand in the world amid increasing cybersecurity threats. Zscaler, Inc. (NASDAQ: ZS) products like ZIA, ZCP, Zero Trust Exchange and SSL security services are also in demand because of remote work trends, as companies are investing to secure their online assets while enabling their employees to work from anywhere.
Wedbush Securities analyst Dan Ives, who recently said in a report that close to 70% of workloads will be in the Cloud by 2025, added Zcaler to his favorite cybersecurity stocks list.
Zscaler, Inc. (NASDAQ: ZS) is also getting the attention of the smart money, as 34 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the first quarter, down from 35 funds a quarter earlier.
Artisan Small Cap Fund, in their Q4 2020 investor letter, mentioned Zscaler, Inc. (NASDAQ: ZS). Here is what the fund said:
“We also exited our investment in Zscaler. Zscaler provides cloudbased Internet security solutions. Cybersecurity remains a top concern for businesses and governments alike as cyberattacks can have devastating financial and reputational consequences. Furthermore, managing the security needs of legacy on-premise applications, a growing number of cloud-based applications (Office 365, Salesforce, etc.) and a remote workforce make operating IT infrastructures increasingly complex. Zscaler’s scalable, cloud-based security platform is a more secure and efficient way to connect users and applications, which eliminates the need for several layers of security (firewalls, VPNs, etc.) developed and built over the last couple of decades. While the pandemic crisis is likely disrupting some areas of Zscaler’s new sales funnel, the company is particularly well-suited to scale and accelerate our market share-gain thesis. Ninety percent of employees are remotely connecting to the enterprise IT network in today’s inverted world, as opposed to prior solutions which are geared to support 10%-20% of workers connecting remotely with the rest connecting from within the walls of a corporate network. Many employees have used traditional VPN connections to log into their networks remotely, but Zscaler’s platform offers a more secure connection without exposing an entire internal network, is easier to configure and is less costly to operate at scale. While the trend toward connecting remote devices over the Internet backbone remains firmly in motion, the stock appreciated over 300% in 2020, quickly outgrowing our small-cap market cap mandate, and we ended our successful campaign.”
