Cisco Systems, Inc. (NASDAQ:CSCO)

CAPS Rating: 4 out of 5

Cisco Systems creates Internet Protocol-based routers and switches that move data, voice, and video packets across networks.


Player Avatar JakilaTheHun (99.93) Submitted: 11/30/2010 12:28:50 PM : Outperform Start Price: $18.15 CSCO Score: -20.10

This is a bit of a gamble, but CSCO does look relatively cheap. The reason I call it a "gamble" is that CSCO seems to inexplicably be performing poorly compared to competitors recently, and their recent guidance is far from reassuring. This may have a bit to do with sovereign deleveraging, as there's been a worldwide shift to fiscal austerity, and CSCO derives a significant chunk of change from public sector customers.

On the plus, they do have a portfolio of strong products and their cash flows have been historically good. Based on most estimates of future profitability, the company is undervalued, but the real question is whether those estimates are accurate or not. As I said, it's a bit of a gamble, but I think the risk-reward balance is favorable.

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Member Avatar JustHanginOut (59.43) Submitted: 12/3/2010 12:44:05 AM
Recs: 0

I think the "illusion" of CSCO being a gamble is exactly what's keeping it down right now. It doesn't make sense for CSCO to be punished by the grim economic outlook when presumably this should be affecting all blue chip companies not just CSCO. While the estimates are a little fuzzy at the moment, after a 16% single-day drop I really don't think you can overestimate them too much going forward. I'm not really in love with CSCO as a company but on a cash basis the stock is cheap. Sub $19 this is a steal.

Member Avatar Broost (23.71) Submitted: 1/7/2011 9:20:14 AM
Recs: 0

I picked it up mid december after it started it's recovery. I don't see it dropping much more anytime soon. For all you over cautions investors put in a buy at $21.00 and you can be sure it's on the rise.

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