NEW YORK (TheStreet) -- After reporting fourth-quarter earnings results, shares of Cisco Systems (CSCO) are under pressure on Thursday. TheStreet's Jim Cramer told Debra Borchardt it was widely considered to be a good quarter, where Cisco beat earnings estimates.
However, guidance came in a little light and 4,000 job cuts seemed to spook investors. Cramer attributed the stock's large run, up 34% on the year, as the main problem.
He added that after Thursday's selloff, the stock now trades at 12 times earnings, far too low for the current growth. Cisco is a holding in Cramer's charitable trust, Action Alerts PLUS.
Microsoft (MSFT), Oracle (ORCL), and International Business Machine (IBM) all trade near 12 times earnings but are in secular declines, unlike Cisco, which remains in a secular advance, Cramer pointed out.In regards to the Cisco job cuts, Cramer said the company has been making a lot of acquisitions and that it made sense to trim some positions, otherwise the company would become too bloated. Along with a 2.8% dividend yield, which is very good for a growth company, Cramer stuck to his earlier call this week that Cisco is a buy on the selloff and would look to purchase shares in the $22 to $23 range. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV