Cisco (CSCO)

(A Top Pick Oct 5/15. Up 18.57%.) He still loves this. Has $40 billion of net cash, and is throwing off $10 billion a year of free cash flow. They are buying back shares all the time and will probably be raising dividend by 10% a year for years to come. They are #1 in the world in their 4 major businesses, all of which are growth businesses. Still generating revenue growth, even with a strong US$, which is not an easy thing to do. Revenues per share is still rising. EPS is in the 7%-10% range for the next several years out. Have phenomenal franchises and are a free cash flow generator. Selling at a pretty cheap multiple, especially after Xing out the cash.

This was once considered old tech, but they seem to be really moving into the Cloud base quite successfully. A lot of their client base is using the Cisco platform to support them on the Cloud. He hasn’t owned this because of the sideways movement it has had for about the last 5 years. Dividend yield of 3.47%, which is attracting a lot of new buyers.

It is rare in technology that you are able to pick something up that is trading at 13X PE with a dividend yield of 3.48%. With people doing more and more on their mobile phones, data traffic has picked up considerably over the last decade, and he feels it is going to continue. This is a key player in helping cell phone providers stay mobile spectrum efficient. At the same time, the company has been going through a transition to get more involved into the Cloud side of things and to position themselves for the future.

Distinct seasonal trends. We are getting towards the end of one of the periods (End of this week). It has had a nice run and is testing a really important resistance level. If you get above it then there will be technical buying coming into the stock. It is also a reason to look for profits as it is reaching the end of the period of seasonal strength.

Has had a nice rally along with some of the value large caps, “the old guard”. You are getting growth on the newer product line and product cycles, especially on the security side. They are now trading at a multiple in the mid-teens. When you get to that level for slower growth, there is a quandary of mid-single digit top line growth, and maybe high single digit growth on the bottom line, and you are now starting to pay a mid-teens multiple for.

(A Top Pick June 9/15. Up 6.06%.) Sold his holdings, because he wanted to raise cash and was concerned about valuations. Thinks it faces currency headwinds with a strong US$. Competitive problems with Chinese manufacturers could crimp their earnings.

This is a terrific company. Have made some really clever acquisitions in the last few years. Feels the dividend is quite safe.

(Market Call Minute.) Going through a transformation in terms of routers to a little bit more Cloud. Have been heavy in acquisitions. You are getting paid a great dividend while you wait, but you will need patience for share price appreciation.

(A Top Pick May 19/15. Up 0.48%.) Sold his holdings earlier this year. Not a bad company. It does well and will continue to do so. It is like the backbone of the Internet. Pays a good dividend.

Looking at this company’s financial statements, you will see that revenues, cash flow, earnings have basically flat lined for many years. It was a growth stock at one point, became commoditized to a degree, and then competition started to steal share.

This has a combination of high dividend yield of about 3.6%, and are ramping up their capital return program in terms of share buybacks and dividends, so you will get about 20% dividend growth. Trading at 12X earnings, so it is not expensive.

He is lukewarm on this. Free cash flow has been falling since 2008. They had $10 billion in free cash flow than, and are down to $7.2 billion today. The competition they are dealing with now are getting the better of them.

They are at the heart of data transfer. They are an absolute leader in the group. Margins are rising and they are increasing their percentage of services. As video picks up in use over the web they are part of the infrastructure. The stock just broke out to new highs. It is not expensive – 11 times earnings. They are committed to returning 50% of free cash flow to investors. 19% per year dividend increases.

(A Top Pick Aug 13/15. Up 1.73%.) Old school technology that people think is going to get slaughtered by newer technologies. The company has shown a very good ability to redefine how it operates and bring product to market. Have been able to grow revenue and hang onto margins, when the expectation was that it wouldn’t. They’ve seen success in getting more recurring revenue through more services and software in their product mix, which they are now going to use more in the rest of their product line.

With this one, you have the valuation on your side. You have had the threat that it should be showing up in the results, but it is not. Have done a very good job of transitioning. They have a fantastic client base and they are asking them what they need to do. There is still a lot of upside based on the valuation. Dividend yield of 3.65%.