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Cisco's Changeover Will Dominate Tech

Stocks in this article: CSCOARUNHPQFFIVDELLCHKPFTNTPANWORCL

Likewise, Cisco's management deserves more credit than they've received. Although the company has gotten more than its share of criticism, management continues to ignore all of the noise and focus solely on execution. However, as Cisco is looking to leverage its strong services business with more cloud-based purchases, Cisco needs to make a play for Palo Alto Networks (PANW) to shore up its security business.

I've said this before and it's worth repeating here; letting Palo Alto get into the wrong hands such as Oracle (ORCL) or even F5 would be a colossal mistake. Palo Alto's recent 50% revenue growth and strong margins can't be ignored. So far, Cisco has shown that it is willing to leave no stone unturned to find growth opportunities -- regardless of how much it cost. And this is one more it needs to make.

Once enterprises start migrating fully into the cloud, there will be no company that is better positioned to deliver the level of one-stop-shop service that will be required. In the meantime, investors would be wise to add shares at current levels as the stock has a good opportunity to trade in the $25 to $30 range during the course of the next 12 months.

At the time of publication the author held no positions 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.
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