Cisco (CSCO)

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%.

Dominant in their market share although they have been slowly losing it. There is not much revenue or earnings growth. This is not what you want to see in a tech company.

Whether it is Facebook, Google, YouTube, etc. the backbone of the Internet needs to be there, and this is the best provider. One really neat avenue is that they are going to get into the server side of things, where they are going to their customers saying they will build it, service it and clip the recurring revenue on that service contract. Yield of 2.97%.

This has seasonal strength from October to January. Right now the stock is not doing too well. Recently established a downward trend, underperforming the market and is below its 20 day moving average. Be patient and wait until we get into October this year, and watch the technicals to see if there is a technical upside move at that time.

Thinks the outlook is pretty good. Has positioned itself across many parts of the Internet of things and the whole wireless revolution. It is a big ship to turn around and get rapid earnings growth from. At its current price he thinks there are better places to be in tech. If you are holding it, it is going to do well. Pays a decent dividend.

(A Top Pick July 3/14. Up 15.76%.) His model price is $43.96, a 54% increase. A 3% dividend yield.

It is in a tech space that is booming. There is an enormous renewal process that is going on and has been since 2000 when the tech bubble broke. This one has nice upside potential.

John Chambers has moved up to the chairman’s position and is reinvigorating the new management team. This whole Internet of things just continues to grow exponentially, and this is one of the companies that makes the backbone for this whole phenomenon of communications as it is unfolding. Trading at about 13 X forward earnings. Strong balance sheet and they have been buying back stock. Dividend yield of 2.97%.

(A Top Pick April 23/14. Up 27.45%.) This has done well. It used to be a growth stock but is now a value stock. Has $30 billion in net cash. Still has the opportunity to grow its earnings in the high single digits. Consistent strong dividend growth. $7 billion a year in free cash flow. Good share buybacks. A lower risk, cheap stock.

His model price is $45.56, an upside of 53%. 3% dividend yield.