John O'Connell, CFA Cisco CSCO-Q TOP PICK Sep 06, 2013

It's a great barbell opportunity with expensive tech name. It's been raising dividends for 10 years. A great name.

After delivering a blow-out quarter in August, shares jumped 33%. Then they just announced another strong quarter, beating top and bottom and delivering excellent guidance and raising their full-year forecast.

The CEO has righted the ship and the company is getting a lot of orders.

Splunk acquisition in cybersecurity segment has secured a lot more recurring revenue for the company. Steady eddy. Keeps making good acquisitions and integrating. Good management, balance sheet, and dividend yield.

Not cheap anymore, so he sold on the valuation call. Nothing wrong with the business per se if you have a very long horizon.

Likes it, but this part of the economy is bleeding now. A tough call and is reluctant to endorse it. A fine company, but it's not the right moment.

A cornerstone company in tech, but there's huge competition in tech and Cisco remain one step behind. Are better companies.

King of the networking stocks. Hit their stride, mainly because of NVDA selling out of Blackwell and H20 and so on. Started beating on top and bottom, raising guidance (even during the tariff time). Pretty fully priced, with a $70.75 price target within 12 months.

Is like Oracle 3 years ago when it was still a database company, building the cloud infrastructure. This is already happening to Cisco. Trades at 16x forward PE, and pays a 3% dividend. Buys back a lot of shares. Is enjoying AI and cybersecurity tailwinds.

Was upgraded today. Trades at 16x PE and a 6% free cash flow yield. Earnings should grow 5-9%. It's been flat for a while, but so was MSFT. Stocks need time to consolidate.

Technically, it looks strong and it breaking to new highs. Likes it a lot. But recently it's been consolidating after a big move up. Wait for a pullback.