Finally, there is Cisco, up 16% since Dow 16,000. Ignore that Cisco sold at $80 14 years ago. Don't think about how this $128 billion company was once the most valuable in the world. Instead, focus on the fact that it just reported a serious upside surprise with actual visibility for more of them ahead. Plus it's been buying back shares, paying a 3% yield and has a fantastic balance sheet.
I have been skeptical of Cisco because of its hit-or-miss reporting, but what seems different this time is that Cisco generated this most-recent upside surprise with sustainable orders from U.S. companies that need Cisco gear. Sure, this Arista Networks (ANET), up 13 points yesterday, could be nipping at Cisco's ankles. But, believe me, it's small potatoes compared to what happens when this juggernaut gets going. So, do you mind if I pay 12x earnings for a one-time growth darling that's got its groove back?
In other words, there are five stocks here that are so easy to justify owning, five stocks that would embarrass no one if they owned them, five stocks that are cheaper than they were not that long ago because their prospects are vastly improved. But the stocks are still reflecting harder times.
Now, just wait until I justify buying the worst performers in the Dow from when we were at 16,000 just a few short months ago.
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Editor's Note: This article was originally published at 5:46 a.m. EDT on Real Money on July 2.