Cisco (CSCO)

(A Top Pick Oct 9/15. Down .96%.) The last half of the year tends to be dominated by consumer spending, and the 1^st half of the year by industrial production. He wanted to take advantage of the tendency for consumer stocks to run higher to the Christmas season. The average gain between October 3 and December 5 is 10.5%, and it was actually higher over that period by 14.8%.

Thinks the stock is worth $40.95 and is currently trading at $27.17. They got a new CEO a year ago, and maybe it is time for him to put his stamp on the company. He would buy this one.

A great company, a great long term success story. He likes it here. They had FX headwinds and some of the general macro noise about spending being weak has people worried, but he thinks that is already in the stock price and he would buy it here. The free cash flow, dividend increases and the long term free cash flow make it worth more than it trades at.

(A Top Pick Jan 28/14. Up 4.06%.) Struggling big time from currency headwinds. They have a new CEO and a very strong balance sheet with a good track record of increasing its 3% dividend.

Facebook (FB-Q), Google (GOOG-Q) and Apple (AAPL-Q) are the pipeline companies, and this one is the ditch digger that makes all the stuff work behind them. Great dividend yield of 3.08%. A solid operator. They are struggling through foreign currency problems, so it may be a challenging environment. Has some competition from the Chinese, but it is a very innovative company and very strongly ingrained in the infrastructure of the Internet, which we’re going to continue to see grow.

They have spent over a decade in China building the base for the expansion that is going to occur. Thinks it is going to be fairly significant and could add a lot to this company. New technologies have to pretty well use this company. It has a good dividend and will grow over the next few years. Dividend yield of nearly 3%.

(Top Pick Feb 27/15, Up 0.86%) He is okay with the return given the short period of time. He is still buying it for new clients. With increased use of smart phones CSCO-Q benefits from networking infrastructure. Their cyber security business was up 20%. It is reasonable at these prices and you get a decent dividend. They have a strong brand and moving from hardware to software is not the only thing they are trying to do in terms of transition. He is okay with the CEO leaving.

It has always generated lots of free cash flow. The challenges are the forward growth prospects for the business and he worries about this.

Retailers do well into the Christmas season (Oct 3 to Dec 5). We had a double bottom pattern and then it broke above resistance. Pick it up on weakness because of the run up it had this week.

Just an amazing company. Their growth has slowed, but they are still at mid-single digit growth. $25 billion of net cash. Over 3% dividend that will be increased 10% per year. He is comfortable with the new management coming in. He thinks new blood will be helpful.

They are an older technology and they have not grown to any great degree. The change in management could lead to some movement, but if you look at the technology, it is not so leading edge, but highly commoditized. There are better opportunities.

Has been a bit disappointing. Has a good yield, and he feels very secure with the name. It has buckets of cash, so there is no debt issue at all. He is just waiting for the recovery to come after this correction, and he thinks this will get up and go. Likes the yield.

What bothers him is that they haven’t gained any traction over the years, yet the price of the stock has gradually moved up, increasing the multiple. He is looking for growth and he likes companies to improve on their own history. Their product line is continually under fire from competitive forces. If you are going to invest in the Tech space and have some spots available for Tech in your portfolio, there are much better places to go, such as Apple (AAPL-Q) Google (GOOG-Q) and Facebook (FB-Q). (See Top Picks.)

(Top Pick Jul. 29/14, Up 9.14%) There is a grad super cycle in the high techs. Now there is the whole renewal theme.

There are a lot of technology companies that people are calling the end of the world and how you run a business no longer applies in this new age. There was always that fear with this company in “software defined networking” and pretty much commoditization of what this company is doing. Have been through a number of cycles and were very aggressive to get ahead of the curve by cutting costs on their legacy business and reinvesting into the stuff they needed to. Growth rates have been very, very strong over the last few quarters. This is a true value play and there is quite a bit of upside as those fears continue to come down. Dividend yield of 2.93%.