# Cisco Systems (CSCO)



## boycapitalist (Feb 11, 2010)

Cisco closed down 14.16% today, even though they beat analysts' estimates. They predict a pricing war is on the way, that they will lose their stronghold on the market. How do you feel? Does this have you buying? Adding it at least to your watchlists?


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## HaroldCrump (Jun 10, 2009)

CSCO is a dog of a stock.
It has done nothing in the 11 years since the dot com bust.
Doesn't pay a cent in dividends.
What a disaster.


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## davext (Apr 11, 2010)

I hate this company. When things are going well, their outlooks are muted or very conservative. When things aren't going as well, they get hammered! 

Microsoft, Intel, and CSCO are all in the same bucket to me. What's worse is when they spend their money buying other companies without getting anything out of it and not giving money back in raising/special dividends.


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## Homerhomer (Oct 18, 2010)

davext said:


> I hate this company. When things are going well, their outlooks are muted or very conservative. When things aren't going as well, they get hammered!
> 
> Microsoft, Intel, and CSCO are all in the same bucket to me. What's worse is when they spend their money buying other companies without getting anything out of it and not giving money back in raising/special dividends.


Just for the record INTC is growing their dividends quite nicely, since 2005 the dividend growth was 100%, 25%, 12.50%, 22.22%, 1.82% and 14.29% respectively.


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## marina628 (Dec 14, 2010)

My niece has worked for Cisco for 7 years, she got her first pink slip about a year ago but it keeps getting renewed.Apparently they have some new contracts which is keeping her employed .Don't think they are out of the woods yet.


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## financialuproar (Jan 26, 2010)

Cisco has earned a spot on my watchlist.

Their balance sheet is a fortress. They're sitting on a net $25 billion worth of cash (40B in cash, 15B in debt), which translates to about $5 per share. This means that you're buying a company worth $13 per share and $5 per share cash.

This company made $1.33 per share in fiscal 2010, and has made 61 cents for the first half of fiscal 2011. The company is trading at a little over 10 times earnings once you strip out the cash.

The market is starting to get impatient with CSCO, and management knows it. I suspect they'll institute a small dividend soon in the attempt to soothe investors. 

I'd look seriously at buying it if the stock dipped below $15. Right now it's cheap, but I'd rather buy when it's ridiculously cheap.


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## OptsyEagle (Nov 29, 2009)

financialuproar said:


> Cisco has earned a spot on my watchlist.
> 
> Their balance sheet is a fortress. They're sitting on a net $25 billion worth of cash (40B in cash, 15B in debt), which translates to about $5 per share. This means that you're buying a company worth $13 per share and $5 per share cash.
> 
> ...


Have you noticed that a lot of big technology companies are trading at very cheap prices. Hewlett Packard can be had for less then 8 times earnings, Western Digital about the same and only about 6 times earnings if you subtract the cash hoard. Lexmark's about 8 x EPS and of course there is Microsoft, again about 8 times EPS and less if you subtract the cash.

I have always said that you make money when you buy technology companies with high PEs and lose money when you buy them with low PEs (works the opposite for just about every other industry) but these values do get tantalizing. The other point here is that in comparison, CSCO is not that much undervalued.


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## HaroldCrump (Jun 10, 2009)

OptsyEagle said:


> Have you noticed that a lot of big technology companies are trading at very cheap prices. Hewlett Packard can be had for less then 8 times earnings, Western Digital about the same and only about 6 times earnings if you subtract the cash hoard. Lexmark's about 8 x EPS and of course there is Microsoft, again about 8 times EPS and less if you subtract the cash.


I agree....do not ignore the market...what it seems to be saying for these companies is that there is no dramatic growth expected in the near future, hence the low P/Es.
Do not jump to the conclusion that a low P/E stock is a "value stock".
Most of these companies are begining to look more and more like consumer non durables or pipeline companies i.e. low P/E, low yields and low growth.
No doubt, stable and reliable i.e. they won't go bankrupt anytime soon so you don't have the risk of losing your investment but it seems that no substantial growth is expected either.
With that much cash, look for more acquisitions coming up in the future.
For example, last few years, ORACLE has been on an acquisitions spree.
If you follow the tech industry (I personally don't), you can anticipate/foretell some of the acquisitions and use it for short term trading.
For example, I've been told that Oracle's acquisition of Business Objects was expected.


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## kcowan (Jul 1, 2010)

I am waiting for them to leverage their Scientific American acquisition and become a force in consumer electronics. They are getting eclipsed by Apple, MS, Motorola et al.


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## financialuproar (Jan 26, 2010)

OptsyEagle said:


> Have you noticed that a lot of big technology companies are trading at very cheap prices. Hewlett Packard can be had for less then 8 times earnings, Western Digital about the same and only about 6 times earnings if you subtract the cash hoard. Lexmark's about 8 x EPS and of course there is Microsoft, again about 8 times EPS and less if you subtract the cash.
> 
> I have always said that you make money when you buy technology companies with high PEs and lose money when you buy them with low PEs (works the opposite for just about every other industry) but these values do get tantalizing. The other point here is that in comparison, CSCO is not that much undervalued.


I've noticed Microsoft had a low P/E, but not the others. I'll check them out.

I like companies with a low P/E and a low P/B. I typically don't buy much trading above book value, so CSCO has a little ways to go.

What you've got to wait for with these companies is some sort of catalyst that'll move the price forward. Whether it's an acquisition, some sort of cool new product, or whatever, it's a waiting game of years sometimes before they find something- if they ever do. Microsoft has basically been dead money for 10 years, and they've branched into video games and mobile operating systems in the meantime. At least MSFT has paid a dividend to ease the pain.


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## rookie (Mar 19, 2010)

*Csco*

i know several people in the forum have this in their portfolios. i was wondering if the price is right to build up a position? their price/book is now < 2 and their cash pile is huge vs their debt. not going through good times now but i believe this is a good company in rough waters meaning the ripe time to get in. i havent studied their dividend history yet.


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## m3s (Apr 3, 2010)

http://canadianmoneyforum.com/showthread.php?t=6194


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## Homerhomer (Oct 18, 2010)

Finally some good news out of this stock, with current market conditions I am not willing to average down just yet but at least there is a light at the end of the tunnel.


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## ddkay (Nov 20, 2010)

Yay they beat expectations by 2 cents after laying off 14% of their workforce.  I wasn't sure where this was going so I put in a straddle a few minutes before close and luckily made a decent profit this morning.


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## Ihatetaxes (May 5, 2010)

Finally some good Cisco news, still sitting on 1100 shares so the 8% jump is very welcome!! Still regret not selling when it was over $21 in March.


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## Toronto.gal (Jan 8, 2010)

Yes, finally! 

Same regret as you. :stupid:


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## Ihatetaxes (May 5, 2010)

With the dividend being increased by 75% I bet we will see $21 again prior to the next payout in October.


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## SkyFall (Jun 19, 2012)

Here you go Wall Street stupid logic! god! luckily I am still up 20%


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## SkyFall (Jun 19, 2012)

Well a year later, almost at the same level, at a certain point I went from over 25% profit to as low as 5%..... decided to liquidate today a major part with 23% profit (after commission & foreign exchange fees). 

I liquidated 80% of my holdings in CSCO.


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## HaroldCrump (Jun 10, 2009)

23% profit is very good for this dog of a stock.
As I said in my first post in this thread over 3 years ago, this is a classic dog.
You did pretty well getting 23% profit out of it.


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## yyz (Aug 11, 2013)

I bought in last December up 19.25% since with the third dividend paying later this month. I 've been pretty happy wih it so far and plan to hold on for a while.It seems lately the old tech like MSFT,CSCO INTC have been outperforming might as well ride it out for a bit. It also just got a target price upgrade today as well .


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## SkyFall (Jun 19, 2012)

yyz said:


> I bought in last December up 19.25% since with the third dividend paying later this month. I 've been pretty happy wih it so far and plan to hold on for a while.It seems lately the old tech like MSFT,CSCO INTC have been outperforming might as well ride it out for a bit. It also just got a target price upgrade today as well .


pretty good.

I am have no problem holding it was a while (the remaining 20% I have), the main reason why I liquidated was I was overexpose to that one stock which is why I need to trim the allocation.


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## Arizona (May 31, 2015)

Considering this stock. Anyone here still holding?


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## yyz (Aug 11, 2013)

Yes still hold it.


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## kcowan (Jul 1, 2010)

Yes good record on dividends.


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