Cisco (CSCO)

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.

Have revamped their product line fairly well. Routers are still expanding. They dominate in this area along with enterprise spending. Stock is only trading at about 10-11 times earnings. Thinks it is okay here. Could trade up to the mid-to high $20 easily. 3% dividend yield.

After their last quarterly report, he doesn’t feel any urgency to get back into the stock. Good company. Involved in many different facets of the technology business but it is also a big ship to turn around and be nimble. Valuation is reasonable at 13-14 times earnings. Nice dividend yield. Doesn’t see huge growth potential. Prefers Apple (AAPL-Q), which has similar valuations but a lot more upside.

(Top Pick Jan 11/13, Up 6.12%) After a disastrous quarter. Revenue this quarter could be down as much as 10%. It was a massive swing. She is staying with the name. The product pipeline is in a very good position. Thinks there is a good floor close to here.

(A Top Pick Aug 21/12. Down 10.36%.) Part of this drop was because of earnings recently reported. The fundamentals for him are strong management, increasing dividend and a strong balance sheet, which allowed them to weather the storm a little bit. Still a lot of infrastructure to be built out. Businesses in technology change quite quickly and this company has adapted very well. Still likes but is cautious.

After several months of breaking out of its congestion zone, it has now come back to that area where it has some support. From a risk/reward perspective, it is worthwhile hanging on a bit longer. This is right in the $19.50-$21 zone. You might want to look at Texas Instruments (TXN-Q).

Doesn’t pay a tremendous dividend but thinks there will be dividend increases coming. Stock fell 10% after-hours. Revenue missed in the past quarter, and they are saying that things are not going to get any better in the current quarter. This company would have to reinvent itself before he would look at it. Growing revenues at only 3%-5%.

(A Top Pick Oct 10/12. Up 26.92%.) Trading at less than 10X earnings. It still provides the backbone of much of the Internet. Its products are basically unavoidable for the build out of services globally. 3% dividend yield.

This is an example of a fall from glory, even though in operational terms it has done really well and has grown. It is going to continue to grow because you will need it for the plumbing that sticks the Internet together. Now paying a decent dividend. Rock solid balance sheet. It is reasonable to assume that there will be continued growth.

$36.73 model price, 57% upside. 2.91% yield. He has recommended it in the past. These large cap stocks are stuck in the water but certainly this is worth holding.

(Top Pick Feb 21/13, Up 17.89%) Lots of cash flow from its legacy business. Targeting software services side of things. Management team is focused and committed to a share return program so 50% of free cash flow comes back to shareholders. She added more to her position following the last earnings call. Just announced layoffs.