Cisco (CSCO)

(Top Pick Dec 2/11, Up 2.7%) Large tech. If it got to $21.60 he would be a seller. A buyer at $15.60. He would add to his position.

It is a name she is watching because it is trading at a single digit multiple and has a lot of cash. They are affected by increasing competition in their space, weak spending in their end markets, and they have been having to cut costs. They saw some strength in public carrier spending. They should grow, but employment has been weak and corporations are not putting in gear. It is very attractive and if we get an upswing in the economy then this is a name that would make a good addition.

Sees some growth. 3.3% yield. Balance sheet is rock solid. People will continue to need servers. It will be a trade only as it is has been in a range. These stocks are essentially utilities that build up cash.

Averaging into a position is a good strategy but averaging down is not. Tech spend is impacted by Government programs. It will trade in its range for a month or two and if it hits the high end of the range, take money off the table.

Very large networking company and have had a lot of issues over the last little while. Great balance sheet. Trading at a very low multiple. They are very enterprise based and this area has pulled back. Also getting competition. Product cycle has not been very strong of late. If you want to buy at these levels and hold for a couple of years you should do very well but in the short-term it will not move a lot.

(Market Call Minute) Sell it at $19

Still selectively buying this for new clients. One of his favourite names in technology. Market doesn’t appreciate its earnings quality and that it has so much cash on its balance sheet. Expect it will do well in this environment where the mobile phones and tablets continue to have faster processing chips. Continues to deliver good earnings. Trading at 7X earnings ex-cash and a 3% dividend.

This is a real value play for him. You have to view companies like this and Microsoft (MSFT-Q) as old legacy players in the technology business, like the Proctors and Gambles, etc. of the technology knowledge business. May not be exciting but they’ve got the brands, they’ve got the products and they’ve got the loyal customers and you know they are going to keep making company quarter after quarter after quarter. Nice dividend. Trading at a very low price.

(Market Call Minute.) This might be a Buy. They have started to turn things around.

This is starting to make a bit of resurgence. Part of their product lines have started to come back in. Their market really looked like it was dying and now they seemed to have reinvented themselves in terms of Cloud Services, etc. and the ability to move that traffic. Has added to his holdings recently. Likes the valuation. Very little downside. 2.97% yield.

Has had a pretty good move of late and has initiated a dividend, which is a good thing. Generating free cash flow. Good management. He sees challenges for the tech sector in general.

Has undergone a couple of major changes in the last couple of years. Transitioning from trying to be a growth company which got them in trouble. Throwing off about $6 billion a year of free cash flow. A 3^rd of the market cap is in cash. Just made a big decision to become a dividend payer and jack up the dividend in a huge way. 2.5%-3% current yield. Tons of room for dividend growth. Going to have top line growth in the high single digits and bottom-line growth in the low single digits. A cheap stock.

Very much dependent on what is going on in the macro environment and with margin compression driven by more competition in that lower level of networking equipment, which is switching and routing. Margins are very high and have been under pressure from companies like Huawei and 3Com. At the same time the macro environment, in terms of overall sales to enterprise, has really slowed. There is now a potential risk from the transition to new technology OpenFlow and Software Defined Networking (SDN), which could easily become a big factor in the next 3-5 years and could have the effect of further commoditizing their technology. Still doing good things in storage area and unified storage stuff. (See Top Picks.)

Sold his holdings a couple of years ago around this level. It isn’t the company it once was. There were years and years when they looked to grow earnings 12%-17% and now they are looking at 5%-7%. Doesn’t deserve the valuation that it did in the past. Slow grower.

This has basically been languishing for 12 years. Very important business and very integral to a lot of different companies and technology platforms globally. They have had a massive crunching down of the PE multiple, which is a major enemy of investors. Doesn’t see any major reason why it should suddenly surge. Would recommend other technology in order to get more gain. 1.9% yield.