This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cisco to Become the Next Apple: Undervalued by 200%

NEW YORK ( TheStreet) -- One of the biggest challenges for investors has always come when trying to assess the investment worthiness of stocks that are already trading at higher multiples. Not only does this get complicated when one does not already have a standard for what represents "value," but it gets a bit more problematic when the investor is not yet certain of his/her objectives -- whether growth, income, or for that matter, value.

In these situations, a market-beating portfolio often comes down to finding the right balance of all three. As enamored as I have become with tech stocks, I will conceded that it is rare to find such a balance, particularly when the added bonus of dividend is thrown into the mix.

For that matter, recently the prevailing question has been, is it possible to find a technology stock that trades at a multiple that would be considered "reasonable," pay out enough of its earnings, offer excellent growth opportunities and to top it off, offer yields that would interest dividend-growth investors?

This situation is akin to finding a needle in a haystack. But if one stock merits such consideration, it would be networking giant Cisco (CSCO - Get Report), not only does it fit the criteria of a perfect stock, but it is positioning itself to trade at $60 within three years -- a return of 200%.

How's That Going to Happen?

"The great one," Wayne Gretzky, once summarized his success by suggesting that "a good hockey player plays where the puck is. A great hockey player plays where the puck is going to be." It seems Gretzky understood the very important investment premise of forward-looking and anticipating trends. And this is a quality that Cisco is starting to demonstrate today more than any other company in the stock market.

A perfect example of this was when it recently announced its intent to acquire NDS Group , a provider of content streaming and security software that will help expand its next-generation video services. But one of the more interesting components is that NDS also specializes in software that allows TV content to be delivered to a variety of devices.

>>Investors Ignoring Cisco . . . but Not for Long

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
CSCO $28.82 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs