In Tech, Cisco Best Equipped to Weather Storm
In part because of the amount it has in cash and investments.
Here are some of my latest thoughts on the California-based company, which by the way, is trading near its 52-week highs.
1. I continue to find it difficult to overlook the jingle in Cisco's jeans. It had more than $35 billion in cash/cash equivalents and investments as of October 24 last year. That gives the company options and leaves yours truly a little more confident that it will better weather the storm than some of its tech brethren.
2. I know that the overall environment isn't super right now, but at the end of the day, Cisco still has the potential to show some decent-sized earnings growth over the next few years. And if it does, the shares can shimmy higher from here. I'll even speculate that a few years out, some of us may be kicking ourselves for not saddling up right here.
3. What about the earnings I mentioned above? The Street is at $0.35 a share for the second quarter. But I'll bet dollars to doughnuts the company comes in north of there -- I suspect by at least a couple of cents. It's been on a roll, punching past expectations the last four quarters. Management isn't going to want to break that trend and let the Street down.
4. But with all that in mind, even if Cisco beats, will it matter? Look what's happened to some other big names. Despite all the hype, Apple hasn't exactly been soaring, and this entire market looks soft as a sponge. Frankly, I'm reluctant to belly up to tech right here and would rather hope for a pullback.
5. A print in the high teens sure would get my motor running.
6. Would it kill insiders to belly up to the bar in the open market here in 2010?
Hey, have a great day!
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