Cisco (CSCO)

(A Top Pick May 31/13. Up 5.53%.) Still likes this. His model price is $37, a 49% increase.

Chart shows a downtrend from last August to December, followed by a bit of base building and then it broke out to the upside this month. Good volume.

This is a value manager’s dream because Wall Street hates this company. All analysts have downgraded it. When he looks at it, he sees a company with about 30% of the market cap in net cash. Earnings will have flattened this year at around $1.95-$2 level. This company remains #1 in the world in all of their businesses. Have tremendous scale. Great management team. Earnings are poised to rebound in 2015, partly due to just general tech spending increases especially in their area. Yield of 3.25%.

Just doesn’t see major growth for a company like this. Margins are being attacked from a variety of different fronts. There is a lot of disruptive technology coming out that will affect them. Good company, but not a growth company.

(A Top Pick May 31/13. Down 4.88%.) If this goes lower, he will continue to Buy. The main issue, over the last year is that the market shunned value companies. They went for growth and momentum. This hasn’t had much market movement, but that means there is more value in it. This is still registering a 64% upside. 3.3% yield.

In this business, you can be dominant one day and then someone else comes out with a better, cheaper, more efficient widget and start taking your growth from you. Still the dominant networking company, but other people have been nipping at its heels and taking market share from them. Maybe okay for a trade, but not one he would run out and buy. He has his worries about tech stocks. That’s all everybody wants to talk about and that starts to worry him.

Should I sell? You always have to think about your holdings as to whether you are employing them in the best possible way today and into the future. Often investors think of their own history and that they want to get even, which is a destructive way of thinking about your portfolio.

Not a big growth company now. It’s tough to complete.

11-12 times earnings this year, so cheap. A lot of cash flow generated off shore. They warned about significant order drop off in emerging markets and people thought that was due to worries about US spying, but now emerging markets are a bigger concern. Earnings estimates may have to come down further. Decent yield around 3%.

(A Top Pick Jan 11/13. Up 11.85%.) Underperformed the market last year. Had a couple of weaker quarters. Had a massive reversal of orders from Asia. Thinks there are a lot of people on the sidelines. Pretty compelling valuation at this time.

Extremely cheap. Sitting with $35 billion net cash on the balance sheet. Has been an under performer. They are #1 globally in their 4 major businesses and are in growth businesses. Generating free cash flow in the $5 billion-$6 billion a year range. On a per share basis, probably $1-$1.50 free cash flow in the next few years. A compelling value stock.

This is old school where Amazon (AMZN-Q) is new school. It’s Cloud versus servers. This company is the hardware of the way we used to do business on laptops and now, with Amazon, everyone is doing their business on tablets. Revenues can grow, but if you are not making much money, the stock is not going to go up. Wouldn’t touch this one. If you want revenues and earnings, Google (GOOG-Q) is a great tech stock instead of this one.

CEO is sounding worried about the outlook, so things must be looking pretty bad. Revenue should be contracting.

Had a virtual monopoly in terms of US communications. As communication networks slowed down, growth opportunities have slowed. They tried to fix this with bolt on acquisitions and broadening of product offering. A lot of their acquisitions have proven not to be good. A company that he is watching but has not pulled the trigger yet is IBM (IBM-N) which is a share buy back story and a dividend grower. A little expensive now but definitely watch it.

(Market Call Minute.) No longer the growth company it used to be. Their last earnings report was quite dismal.