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Cisco (CSCO)
#13
Wow. CSCO turns in a terrible quarter and is taking a beating today. But they raise the dividend. Overnight, it goes from sub 3 percent yield to almost 3.5 percent.
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#14
Value trap or opportunity?

According to the release the company has $47B in cash and generated $2.9B in the quarter.

$2.9Bx4 = $11.6B in annual cash flows.

CSCO currently has a market cap of ~$117B with ~$16B in debt.

Stock trades at about 11X projected earnings.

3.5% yield coupled with the big buybacks and great cash flows I don't see much risk here unless the company's sales completely implode.
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#15
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.
Alex
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#16
I held CSCO through the dot.com bust. Angry I still ignore it for no good reason other than I was stupid at the time.

I guess I have to get back looking through their financials. I have a different mindset now. Plus they pay a dividend. Wink
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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#17
I'm starting to warm up to CSCO now. Anyone have any new opinions or ideas? I always like news like this:

http://seekingalpha.com/news/3079006-cis...asper-1_4b

My style company. Acquisitive and hopefully accretive...

I'm not long yet but probably will be soon....
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#18
This is a great company with great financials. It has a very solid 3.6% yield currently, and I think it will approach 4% with the expected April increase.

The current cash on the balance sheet exceeds all liabilities, so it's likely there will be more IoT related acquisitions in the near future.  I think Jasper is a solid acquisition and I think CSCO payed a fair price.

A couple of downsides/risks:
* The demand for their products has been weak over the last couple of quarters, but this is also true for most other companies.
* Their reliance on acquisitions instead of internal R&D to generate growth.
* A short dividend track record (initiated in 2011).  However, since 2011, growth has been fantastic and management has stated they plan to return a minimum of 50% of FCF to shareholders through dividends and share buybacks.

I think it is undervalued right now.  My conservative fair value is around $29-$30.  I opened a position a couple of weeks ago and plan to add more in the coming weeks.

EDIT: Another small, but nice bonus... The dividend is paid in January, April, July, October. I don't receive many dividends from other companies during these months, so CSCO helps even out the monthly cash flows a little bit.
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#19
(02-05-2016, 07:34 PM)Caversham Wrote: This is a great company with great financials. It has a very solid 3.6% yield currently, and I think it will approach 4% with the expected April increase.

The current cash on the balance sheet exceeds all liabilities, so it's likely there will be more IoT related acquisitions in the near future.  I think Jasper is a solid acquisition and I think CSCO payed a fair price.

A couple of downsides/risks:
* The demand for their products has been weak over the last couple of quarters, but this is also true for most other companies.
* Their reliance on acquisitions instead of internal R&D to generate growth.
* A short dividend track record (initiated in 2011).  However, since 2011, growth has been fantastic and management has stated they plan to return a minimum of 50% of FCF to shareholders through dividends and share buybacks.

I think it is undervalued right now.  My conservative fair value is around $29-$30.   I opened a position a couple of weeks ago and plan to add more in the coming weeks.

EDIT: Another small, but nice bonus...  The dividend is paid in January, April, July, October.  I don't receive many dividends from other companies during these months, so CSCO helps even out the monthly cash flows a little bit.
Thanks for the feedback, I initiated a small position Friday and I like what I'm seeing with the company.
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#20
I am planning on buying some CSCO next week.
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#21
I heard from someone whose son works at Cisco tonight that they used CSCO equipment at the Super Bowl, wifi stuff and the ability to order food at the game directly to you etc...Nice to hear that a recent long is the star of the show at the Super Bowl.
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#22
Decent earnings from CSCO and a 24% dividend raise. Forward yield is now ~4.4%.
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#23
Wow, that's a pretty confident raise. Looks like it is up almost 8 percent after hours. I haven't updated my sheet on CSCO in a while -- I'll have to find a few minutes to do it!
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#24
I've read about this company off and on for years! I first looked into investing about 2 years ago, I think it was about 17 to 19 dollars per share? I'm going from memory so I'm not 100% positive. This company is a very big part of the industry I work in and I see their name everywhere, hell, I see their name right now below my TV set, lol. Cisco, for a few years now has proven itself to be very shareholder friendly between dividend increases and share buybacks, I wonder what their dividend payout ratio goal is going to be? I'm assuming this growth has to end sometime, eventually.

This year has been rocky and I've been really quiet maintaining my inner basic instincts to invest slowly instead of larger lump sums here and there. Slow and steady kills me LOL.
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