Cisco (CSCO)

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.

Sold his position last year at around $26. Likes the company very much and is a big believer in the evolution and growth in the Internet of things. This company is a central component of that hub. They are dealing with competitive pressures out of China, and a lot of their major customers are building a lot of their own products internally. It was major currency headwinds that caused him to pull Sell. Good strong balance sheet and a good dividend yield. He expects he will own this again in the future, but doesn’t think the stock is going anywhere soon. We are still early in this correction.

(A Top Pick Feb 27/15. Down 18.1%.) The story hasn’t changed. With the increased usage of smart phones, there is a need to stay spectrum efficient. This company is helping the carriers do that with networking solutions. Also, with the Internet of Everything, this company tends to benefit in terms of integration of networks. He is excited about their cyber Security side of things. Pays a great dividend, so you need to be a little more patient with this.

He owned it years ago and did well. A lot of their technologies have become commoditized and the competition has become extreme. The CEO has stepped aside. He may be talking about this one in two or three years. He would want to have more certainty before committing capital to it.