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Cisco (CSCO)

Cisco (CSCO). Michael Dietrich. Business Summary. Leading supplier of data networking equipment and software Entered into video conferencing, web based collaboration and data center servers

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Cisco (CSCO)

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  1. Cisco (CSCO) Michael Dietrich

  2. Business Summary Leading supplier of data networking equipment and software Entered into video conferencing, web based collaboration and data center servers Routers, switches, wireless, security, physical security and building systems, optical networking, network management and automation, Cisco IOS and NX-OS software, and interfaces and modules Switches and routers account for 60% of revenue

  3. Recent News Revenues and operating margins were higher than anticipated for the first quarter Produced 2.1b in free cash flow Bought back 1.5b in stock at 15.37 Acquired BNI video which allows CSCO to advance in the Videoscape TV platform Also acquired Comptel and Versly

  4. Key Statistics Purchase price: 19.42 52week: 13.30-22.34 Current Price: 18.00 Dividend: 0.06 Fair Value: 26.00 Mkt Cap: 92.8b YTD Return: -1.1 Holding Return: 0.66 Shares: 235

  5. Stock Checklist

  6. 1 Year Chart

  7. 1 Year Comparative Chart

  8. Strengths Leader in its industry Demand outlook for Cisco’s product is positive

  9. Weakness Its rapid growth generated competitive responses and it destroyed the value Its noncore initiatives are dilutive and may be damaging Cisco’s competitive advantage in its core markets.

  10. Opportunities Their acquisitions prove that they are expanding their business and because of this they can earn consulting deals

  11. Threats Competitors like HP and JNP In routers, Cisco is seeing increasing competition from Alcatel-Lucent and Huawei which limits its opportunity to move into China Short term financials will be volatile Adoption of these private and public clouds creates a long-run risk

  12. Recommendations Buy: 11 Outperform: 2 Hold: 15 Underperform: 0 Sell:0

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