This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

Cisco Grows Where Others Can't

Stocks in this article: CSCOFFIVJNPRHPQPANW

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.

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.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,195.42 +221.11 1.30%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,566.1380 +16.9120 0.37%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs