Cisco (CSCO)

It is just starting to get going. When you consider the net cash flow there is a lot of value in the stock. The company has been very up front about how they are dealing with competitive threats.

Has done very well recently. They were having some challenges with some of the smaller players taking share in individual markets. Good company. Valuation has crept up a little bit. He sees better value in Apple (AAPL-Q).

Some of these technology stocks are really taking off. Outperforming the market right now, during a period when they are supposed to start lagging the market. In technology stocks, usually all of the good news is built in during the month of January and tends to underperform between about mid-January all the way through to March. Then from March all the way through to September they take off again. If you are taking a seasonal perspective, then it is probably best to stay away. They can be very volatile here.

One of North America`s best retailers. It is at 30 times earnings, which they probably deserve. It is simply too expensive for him. But they have been delivering over a long period of time.

Thinks there is growth here. A rock solid balance sheet. He is a big believer in this internet of things and how more and more devices are going to be connected to the Internet, and this company is the major builder and supplier of a lot of those backbones. Trading at around 14 X next year’s earnings. Yield of 2.70%.

The US equity market is seeing net money put to work, but there are only 4 or 5 key sectors that are leading this market, and technology is one of them. He likes those companies that are in high growth industries with something special and a special pricing power, which can give them revenue growth. The technology companies that he is invested in are big cash flow generators, and this would be one of them. 2.7% dividend yield.

Has been focusing on the mobile side of things. Did 6 acquisitions last year to beef up their ability to take advantage of what is going on in the mobile side. With increased sales in smart phones, there is certainly an increase in data traffic. This company’s network solutions help carriers manage that data traffic, but also stay spectrum efficient. From that perspective, he likes the name. The challenge at this point is China, where a large part of their revenues come from, but where they have a brand imaging problem with the NSA scandal. The Chinese government is saying the US government spied on them using this company’s equipment. This pays a decent dividend, but the valuation is not compelling enough for him.

In the high technology area, the world is kind of migrating into the cloud, so he needed to find a high-tech company that has big exposure to cloud computing and that is also cheap. Lots of upside. The business is interesting and is growing. He also likes the exposure to the US. It is quite possible for the growth to start to accelerate and investor interest might start to accelerate also. Yield of 2.81%.

Corporations are full of cash and don’t need to build capacity, but are looking for productivity. One place where they are spending is technology. Technology is expanding very steadily and is one of the best performing groups in the market. This company is not a high growth company like it once was. Have a very strong balance sheet with very steady cash flow growth, buying back shares and increasing their dividend. Expects technology will have a pretty strong market heading into year-end. This would not be his #1 choice. He would prefer Microsoft (MSFT-Q) or Intel (INTC-Q), but you won’t get hurt here. (See Top Picks.)

Feels this is probably being driven more by the market, and less by company fundamentals. They were a high-growth, exciting, cutting-edge technology company 10 years or so ago, but have become a fairly old, staid, slow growth technology company. The 2014 revenues are below the 2013 revenues.

A mature technology company. In their end markets, spending is not as strong and somewhat moderating their CapX spending as their networks have primarily been built out. Also, they are seeing a lot of weakness in emerging markets. Restructuring and reducing their employment base by about 8000 jobs. Trading at a relatively low multiple of 11X forward earnings and gives a pretty attractive yield, but not a lot of earnings growth. New competitors are coming in, and they are losing share.

This is not the 15% earnings grower that it was. It is more of a 6%-8% earnings grower. However, they have $30 billion net of all debt which they are aggressively using to buy back shares and raise their healthy dividend of around 3%. They remain #1 in the world in their major industry sectors, which are growth sectors. He is looking for earnings to grow in a 6%-8% range in the next couple of years. If you want a conservative name, trading at a pretty low multiple, with a pristine balance sheet and growth, this is a good bet.

Hasn't owned this for 12 years. It is still very important to the global infrastructure of what goes on in technology. He doesn't think you will see PEI multiples expanding at any great clip in the space. He would rather be in a newer and fresher technology space.

They see slow spending from businesses. Likes what they are doing increasing dividend and buying back stock. He doesn’t like the price when he marries it with the growth potential. Wait for lower prices (teens).

It is old technology. They did most of their business in routers and switches. They now compete against entrenched companies, rather than start ups. They have lower growth metrics and so he would pass on it.