Cisco Systems, Inc. (CSCO)

John Chambers (1) sneezes and (2) is honest about sluggish demand for the next several months and the stock price craters (again). We either believe in the long-term viability of communications and CSCO's innovation and delivery, or not. We have Cisco Systems rated at a projected return of 25-26% based on 16% growth and industry leadership in margins -- an excellent quality rating. Gesundheit, Mr. Chambers.

Unless you believe that the Internet is going away, then you have to be bullish on Cisco. Why? Well, for one Cisco accounts for about 85% of the Internet. There are competitors, but none are even close. Another thing to consider is that no one purchases a high-end Cisco product (a GSR, CMTS, or metro ethernet router like the 10720) and forgets about it. They buy support contracts and they also have to keep it upgraded. So the revenue from the sale doesn't end with the sale. To me, Cisco is very much like the early railroads. The knock on Cisco today is that their growth is over. I'm sure that was the knock on Union Pacific in 1870. Would you like to find a trunk full of Union Pacific stock from 1870? Cisco's management did an impressive job shaking off the tech bubble and their recent acquisition of SA also seems like a smart move. Plus they have one of the best share repurchase programs around and they've recently decided to step it up even more. They generate plenty of cash and they've done a great job managing shareholder equity. Management-A Fundamentals-A MOAT-A Growth Opportunity-A Price-A

Massive cash advantage, using it to secure their field of endeavor through acquisitions of smaller geniuses.

A friend recently asked me why I'm more bullish on CSCO than almost any other company. In response, I asked him a simple question: "What gives your car value?" Puzzled, he responded, "Huh?" I repeated my question. He eventually answered "Its tires." To which, I responded, "No." "Then it must be its frame." Again, I responded in the negative. "Is it the axles?" "No, I said. The only thing that makes your automobile valuable are the roads upon which it travels. "Okay...?" he said.

What I consider to be the premier technology company with a moat that is defended in several ways.

1) They have built their name to mean the best and most reliable...so much so that my buddy at CDW cant persuade IT guys to switch down to cheaper competitors. They would rather pay up and rest assured CSCO is powering them.

2) Their ability to acquire competing technology and innovation - and bring it in house. They are un-matched at this.

John Chambers was educated at Indiana University - so it is no wonder that he is hailed as a top CEO in corporate America....just ask Nortel (NT) how effective he has been in the past 9 years.

$130 billion market cap

Profit Margin (ttm): 20.36%
Operating Margin (ttm): 23.89%

Return on Assets (ttm): 10.53%
Return on Equity (ttm): 24.46%

You love to see these numbers on a company you are buying for 3 times sales.

$26 billion in CASH
only 6 billion debt.

HUGE amount of cash - discount this and you have a very cheap company.

When you can buy (1) CSCO and (1) JNPR and its uqual to (1) AAPL....you know things are out of whack.
(talking market caps)

CSCO future catalysts = build out the emerging world. Video on demand. Video conferencing.

John Chambers rules!

While I like the fundamentals in the underlying company, the reality is everything working in Cisco’s favour is already factored into share prices. Bulls point to numerous factors as to why you should own this company, but the reality is, no bears or neutrals are left to convert and that exactly what the charts are saying. Everybody who wants to buy Cisco already has so only profit takers are moving this stock. Until we start seeing a new catalysis, shorts and bears are going to dominate in every rally.

I'm in the process of replacing all the Cisco equipment I bought in 1999-2000, and I suspect a lot of other companies are doing the same. Their products carry a premium price, but I'll gladly pay it for their high reliability and top notch support. They've been a little slower to innovate compared to some smaller players (in areas such as bandwidth management), but due to their size, I think they'll be able to catch up quickly. I deal with technology vendors on a regular basis as part of my job, and I can't think of any that measure up to Cisco in the area of support. Support is a key differentiator for a small to mid-sized business, and there are a lot of us out there. I think Cisco is going to see a lot of repeat business in the replacement cycle that should be happening right about now.

Leader in the Networking world. Connectivity is key to sharing information, applications, etc. They are in the driver seat.

$21.50 looks to be a tough nut to crack. The rally seems to have run out of steam. Daily Stocs are in overbought territory and look ready to head down. Daily MACD has flattened. Yesterday's (28 Aug) bullish engulfing candle has not been followed through today. On balance looks a Short. Decent Cover Target would be around $20.00 where a Fibonacci bounce could be expected.

US military will be forced to upgrade to new routers/switches to support IPV6 protocol. This will be huge business for Cisco, plus expanding Chinese infrastructure should provide good long term growth.

Next generation internet upgrade to IPv6 from IPv4. Cisco stands to make a tremendous amount of cash during this global upgrade as they control a majority of the world's market share in routers

Cisco is still undervalued now. Once the market realizes it, the value will rise up. Several Analyst are predicting 12 month targets of $24-26 and Cisco is currently at ~$21. That translates to 15-25% gain

With their brilliant CEO in John Chambers Cisco will find a way to become the dominant player in the high tech routing world again. When a CEO will take yearly pay of a $1 to make things more profitable I think you have a winner in this company.

Go Cisco! It's all about the network as a platform and Cisco has been more versatile and flexible than most other companies their size. Add in a great track record, tremendous cash flow, continued stock buy backs, and dividends in the future, the next few years look great.

I can't say enough good things about Cisco. It's the greatest company with the greatest vison that looks out 3-5 year market tranistion using transformational technologies. look for them to have a break throuh decade. Target price is 75 by 2010.

I see this company making profit for quite a while now due to its recent purchases, which are helping to quicken this company up a bit. Till recently this company had not seen much activity in the stock market till just now when it released its recent quarterly results.

I first bought Cisco Systems in 1996 or so and rode it up to June of 2000. I remember selling it to pay for major expenses. I am again buying in. This is the information highway manager for stocks. There is really no tech without Cisco devices. The future is their R&D budget + aquisitions.

I'm maintaining an 'outperform' pick on CSCO despite disappointing performance since the earnings release and conference call earlier in May '07. The stock fell after the conference call despite slightly beating analyst's estimates and reiterating good growth forecasts of 15-16%. Basically, CSCO beat estimates, but many were expecting a blowout and didn't get it.

With recent pullback to the mid 25's, CSCO is trading at a fwd PE of about 16.5, only one point higher than the S&P 500. This for a company with strong growth, $22+B of cash and only a little over $6B in debt. If they're only getting typical money market/t-bill rates, CSCO is netting nearly a billion a year just from the cash.

I believe there's $10-$15 upside potential with very little downside risk from here.