Cisco (CSCO)

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%.

This, along with a lot of other big old technology companies, is in its post growth phase. As the networks get built out with less new or replacement demand, the growth slows down. He likes this company. Has a $28 target price. This hardware company is getting into social media, analytics and cloud, known as SMAC. Feels the dividend is good. Dividend yield of 4%.

With the Internet of things, demand for their products continues to be on an incline. We are doing more and more with our smart phones every day, and the networking tools that this company provides helps with that, especially the carriers to stay spectrum efficient. They have been growing through acquisitions. Valuation is reasonable and you are getting a 3.92% dividend while you wait.

The largest global manufacturer of network switching gear. Crashed in 2000 along with all the rest of the tech stocks, and kind of flat lined at around $25 for the longest time. It is now starting to rise up above the $25 level and you get a nice dividend. Management is really talented. He likes to be in an industry where there are very few competitors, which would be the case here.

A well regarded company and is well run. Has a new CEO. Pays a good dividend and has a strong balance sheet. The major issue it has is that it is increasingly dealing with Chinese competition. One of the big risks in the market right now is protectionism. Doesn’t feel it has a huge amount of growth in it, but it does pay an attractive dividend. Good value at around $25, but at $28 you Sell.

(A Top Pick April 30/15. Down 0.12%.) Still likes this. It is strategically placed and he hasn’t given up.

(Top Pick May 19/15, Down 1.96%) Old tech. It just needs a catalyst. Lots of value. Maybe a year from now it could be up 50%.

(Market Call Minute.) A good company and have made the transition to the new digital switching era. Not expensive.

Took a pretty good hit at the start of the year, but has recovered almost all of that. Unlike a pure growth stock, this tends to get lumped in with the momentum or growth stocks, but scores better on a valuation basis. Scores in the top 10% for him on valuation. Trading at 7.4X EBITDA and 14X PE. If we are going to get another round of cyclical recovery in the US, as manufacturing picks up again, there will be incremental spends to companies in IT services like this. 3.7% dividend yield. No debt and they have cash in the balance sheet.

With more and more of us doing more with our smart phones, it is important to stay spectrum efficient and CSCO-O benefits from this. They are affectively doing acquisitions. They are buying strategic acquisitions and integrating them. 12 times forward earnings.

It is in the same zone as mature tech companies. It is a more senior business, but is not rewarded the same way as smaller businesses. He believes this business is essential for the backhaul business. They have to be competitive in their pricing so there is going to be margin compression and they will continue to not be able to jack up the dividend aggressively. He would prefer a bank in terms of the dividend.

Had owned this many years ago, but it got overrun in terms of a commoditization play. Obviously routers and switches got a little old. Newer technology took over, so the company has become a very, very slow grower, and hard to get out of its own way.

(Top Pick Feb 27/15, Down 14.65%) You’ve seen a broad sell off in general in the tech sector. It’s up 10% today after reporting earnings. That is in line with why they bought it. Mobile providers are in need of bandwidth. Cyber security is where money is being spent and they have done key acquisitions there. 11 times earrings and they raised their dividend.