Network Stocks: 2 Buys, 2 Sells

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.

Cisco ( CSCO)

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.

If you liked this article you might like

These Stocks Pay You to Own Them

Pret A Manger Takeover in the Works; Cisco's M&A Shackles Come Off - ICYMI

Market Signals Change of Direction: Cramer's 'Mad Money' Recap (Monday 9/18/17)

This Company Could Be a Fraud, Noted Short-Seller Andrew Left Says

John Chambers' Exit From Cisco Could Pave the Way for Big Moves