Cisco (CSCO)

It's done really well, but he's starting to wonder how much more room it has to run. Same with Microsoft. They're seeing limited headway in China and emerging markets. Current valuations are stretched.

He has been recommending this for years. It is finally hitting new highs. His model price is $58.76 or a 24% upside. It is finally getting its mo-jo. (Analysts’ target: $50.04).

Technology in general is the place to be in terms of growth for the next 2-3 years. Trades at reasonable multiples. New management is doing a good job. Good growth prospects. (Analysts’ price target is $50.04)

Revenue growth has been flat for the past five years, but they are sitting with $30 billion in net cash. The dividend has doubled over the past five years and he expects that to repeat. It is somewhat out of favour due to the lack of revenue growth.

Amazon just said that it is going to start selling servers. Cisco took a hit on that. His model price is $53.16 which indicates a 25% upside. Cisco is a lot more than servers so there is opportunity for this to be a wake-up call to the Board that does more good than harm. (Analysts’ price target is $48.42)

What tech stocks have growth and pay 4% dividends ? Cisco which is trading around $42. He owns it. Pays a dividend above 3%. IBM (he doesn't own it) who are turning it around. Right now in the low-$140's is a good time to buy it.

It's held up well in the past year with a rising 200-day moving average. Not a high-grow company, maybe 6% a year. It doesn't excite him. Other such companies are growing faster.