Cisco (CSCO)

Expect there will be growth in the stock price in the next 6 months to a year. Company seems to have turned the corner. Last couple of quarterly estimates have been a lot more positive. Doesn’t think you can go too far wrong over the next 2-3 years.

Really well-run company. He debated buying this before their numbers ran up. Cheap company with a great balance sheet. Has lots of cash. A large percentage of their revenue comes from the government side of business and this is where people are really uncomfortable. Have done a very good job of cutting their cost structure and making some decent acquisitions and coming out with some new products. Doesn’t expect you will see a lot of upside in the stock but has a great dividend yield.

Had appositive transit. Model price suggests 40% upside. 2.83% yield paid. Has all the things he wants in a large cap stock.

On her watch list as they will benefit from improving economic and employment growth because they are a networking stock. This is basically a hardware company and hardware is becoming so commoditized, even for this company which is a leader. Have a lot of cash. She is not keen on technology hardware companies right now.

Earnings forecast is in an uptrend so it is looking as though it is pretty good value. Broke over one of his key resistance points recently at $23. If those forecasts keep on going, he could see this at $28.

Operates in a couple of verticals that are influenced by government spending. Thinks they can ride out the pullback until the economy picks up. You will see a couple of dollars of upside short term.

This one has been a laggard. Large Cap tech is a big theme of his. Recently came out with earnings that were very, very good. His model price is $35.58, a 46% upside. Yield of 2.77%.

(Top Pick Feb 20’13, Up 16.62%)

Got into it last summer. Story has played out as he had hoped. 70% market share in core business. Really well managed company.

Cisco ranks well in their ranking system. If you don't own it, don't buy it's too high right now. Tech sector is one of the more undervalued sectors now.

Predominant name. Growth hasn't been that strong. Management team is strong, balance sheet is pristine. It's generally positive, but you will not see it breakout.

Has about $35 billion of cash, net of all debt, so there is zero risk to dividends. They generate probably in excess of $5 billion per year of cash. Buying back shares. Still growing their top line at 6%-7% range and growing their earnings at 10% plus. Phenomenal long-term value.

Has 70% market share and about 40% of its revenue is recurring in service contracts. They committed to giving half their free cash flow back each quarter in the form of dividends or Buy Backs.

Still has fairly good growth and is the best-of-breed company in the network equipment sector. Also has attractive valuation as well as a high yield, which you never used to see in the IT companies. Good risk/reward. (See Top Picks.)

Was a real darling until the 2000 timeframe and then the networking market fell on its back and has gotten tougher and tougher. From a macro point the increasing penetration of smart phones is going to lead to higher and higher levels of network requirements, more fibre and we are starting to see companies that are in those areas start to move. Unfortunately this company’s big competitor is Quaway (?) out of China where they want to get more Chinese exposure. Getting slow growth out of Europe because of the recession. Because they are a global player, they are dealing with the US government. Near-term growth outlook is challenging. Dividend and balance sheet are very attractive but we need to see it at a lower level.