NEW YORK (TheStreet) -- With the expected recovery in enterprise IT spending, network stocks stand to benefit a great deal. However, not all are the same. Some are better positioned to produce market beating performances, while others will likely lag behind. Here are few names to consider.
With seven consecutive earnings beats, network giant Cisco continues to move in the right direction. It still seems the company has an uphill battle when it comes to convincing a market that rarely forgives and certainly never forgets.
There aren't many companies outside of Apple (AAPL) that have had the string of recent performance as Cisco. In fact, over the past seven quarters Cisco has demonstrated consistent revenue growth averaging over 6% while averaging 5% profit growth during that span.The company started its fiscal 2013 just as it ended 2012, with another earnings beat. The network giant reported net income of $2.6 billion, or 48 cents per share, on revenue of $11.9 billion. Not only was this enough to beat analysts' estimates of 46 cents per share, but the results also represented 11% profit growth. Likewise, revenue grew by 6%, exceeding Street expectations of $11.77 billion. Cisco continues to see excellent improvement in its services business with revenue growing year-over-year by 12%. Some of the company's largest customers have contributed to the growing demand as evident by the 9% increase in orders. The stock is a steal at current levels. Juniper (JNPR) Cisco's resurgence means it is stealing market share from rivals such as Juniper. Juniper has always had a solid product portfolio; unfortunately, it has lacked in execution. Unlike Cisco's recent M&A acquisitions, Juniper has not been able to find new ways to grow and its R&D attempts have been uninspiring. As a result, the company has not been able to create any sort of momentum. Remarkably, the stock has yet to show these concerns. This means that at a P/E of 51 with marginal growth, shares are just too expensive. If Juniper can make a play for new entrants such as Palo Alto Networks (PANW) or Aruba Networks (ARUN), then it might have a chance. But as it stands, both are better long-term options than Juniper.
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