02-13-2014, 03:02 PM
I think that the big debate relates to the extend that CSCO relies on hardware based cloud infrastructure sales, when so much of new sales are software managed. My terminology is probably all wrong, but expresses the concept well enough, I think. Anyway, software based cloud solutions undercut CSCO sales and margins. So in my mind two questions arise. Do CSCO's proprietary hardware cloud solutions and support offer great enough advantage to generate continued customer loyalty? Can CSCO modify its focus of business to include fresh high margin products and services such that it continues to grow cash flow and profits? I'm not sure that those answers will come in a timely fashion.
For me, I'll continue to use CSCO as a covered call play, but if the answer to my questions is an eventual yes, then the shares will get called and I'll be out of the CSCO covered call game. However, at that point, I would consider rebuying a portion of the shares in the long term hold account.
For me, I'll continue to use CSCO as a covered call play, but if the answer to my questions is an eventual yes, then the shares will get called and I'll be out of the CSCO covered call game. However, at that point, I would consider rebuying a portion of the shares in the long term hold account.
Alex