Cisco Grows Where Others Can't

Yet, despite what has been a difficult transition to "mature status" for Cisco, investors continue to forget that the company still owns 60% of the routing and switching business.

This is a testament to not only the quality of the company's product portfolio, but also to how loyal Cisco's customers have remained. Meanwhile the company's management has been executing as well as can be expected, reducing costs and trimming the fat from the company's less-than-favorable acquisitions.

Aside from maintaining its momentum, Cisco's current challenge is figuring out ways to fight off the competition -- from the usual suspects, such as the aforementioned F5 and HP, but also new entrants such as Palo Alto Networks (PANW).

Palo Alto in its first earnings report as a publicly traded company produced not only year-over-year revenue growth of 90%, but grew that number by 15% over the prior quarter.

Although Palo Alto is in the early stages of its business, it is hard for even a well-established company like Cisco to ignore numbers like these. Nonetheless, Cisco still offers many market and enterprise advantages that smaller rivals can only hope to duplicate. Though Cisco may no longer be able to grow to the extent that it did in the late '90s, in many respects its "new growth spurt" has likely just begun.

But where's the love?

Bottom Line

I have no shame in admitting that I have always liked Cisco and have been one of its biggest cheerleaders. However, a sense of vindication is felt when discussing its consistent results in the face of significant market turmoil.

What's more, Cisco's strong fundamentals and particularly its cash position, which sits at close to $50 billion, offer the company more options for acquisitions to help grow profits and market dominance for the next decade.

Investors would be wise to love Cisco as current levels -- even as Wall Street continues to ignore the good.

At the time of publication, the author held no position in any of the stocks mentioned.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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