Cisco (CSCO)

The backbone of the internet. Their products can be replaced by new and better hardware. They will have more competitors than in the past as software can do a lot of what they do. It is a value trap.

Thinks the dividend is going to continue to increase. He likes the balance sheet. Really believes this whole Internet of things and connectivity in the global world we are moving into, is really a big deal. This company is at the centre of all this. Thinks it is going to be a big winner. The fair value is considerably higher than the current value and you are going to get paid twice what a 10 year treasury bond will give, while you wait.

It was his second largest position at 38 times earnings. They went to 200 times earnings and he sold and has not gone back in since because they are now a hardware based company and others can do what they do through software.

He likes the dividend and he likes the name. Have positioned themselves to be very relevant for what is coming up for the next 5-10 years. Have been active in the wireless space, so with everybody doing so much on their smart phones, mobile data traffic has really picked up. Also, cyber security threats will increase demand for this company’s networking products. Just reported and they had a great quarter. Yield of 2.83%.

Shows up on his screens as a pretty good purchase at this point. Have had some decent earnings reports recently. They are the backbone of the Internet. Trading at 13X earnings with a high single digit growth rate. The large cap technology names are doing well. A good name.

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.