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Sell Juniper, Buy Cisco, ARM and Citrix

NEW YORK ( TheStreet) -- It is no secret that I have been an unabashed cheerleader of networking giant Cisco (CSCO - Get Report).

So it would surprise many to learn that I have also been a closet admirer of one of its chief rivals, Juniper Networks (JNPR - Get Report). However, on the heels of a disappointing quarter for F5 (FFIV), one that we correctly called, I'm finding it increasingly difficult not to sell Juniper ahead of its earnings report Tuesday after the market close.

Instead, I think investors should be loading up on Cisco.

Sell Juniper, Buy Cisco

For Juniper, as great as its product portfolio can potentially be, its challenge will continue to be finding ways to grow and create the sort of momentum that inspires tech investors to believe. With increasing competition from the likes of Hewlett-Packard (FB) and Dell (DELL) -- both of which are now recovering -- Juniper may find it increasingly difficult to find growth opportunities.

In its first-quarter report, not only did the company show a drop in profits but it was the fifth consecutive quarter in which its gross margins declined. The company reported a profit of $16.27 million, or 3 cents per share, a decline of over 87% from the previous year.

So as much as I want to make a bullish case for the stock, this trend does not inspire enough confidence to warrant it. So what can investors expect this quarter?

The company said it expects revenue in the range of $1.03 billion to $1.06 billion and adjusted profit in the range of 15 cents per share to 17 cents per share. Analysts were expecting a profit of 20 cents per share on revenue of $1.05 billion. So it seems logical to expect that an earnings disappointment just might be in the works.

For years the prevailing debate among the networking companies has always centered on Juniper and Cisco, specifically which one is the best. Clearly, Cisco remains the leader as questions of Juniper's overall health remain an issue. Meanwhile, Cisco has been resurgent, demonstrating it has not forgotten how to execute and deserves to regain its status among the elite.

Buy ARM Holdings

Because of the dominance of Apple's (AAPL) iPhone and other mobile devices from Google (GOOG), chip stocks have stood out as one of the best derivative plays on the market.
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