Cisco (CSCO)

He likes the Splunk deal, and the stock pays a 3% dividend.

Business doesn't have A.I. tech, but management team and balance sheet are strong. Overall, a decent company. Demand for hardware still strong. 

King of networking, feeds into AI. Legacy tech still being lugged around. Beat on top and bottom, cut guidance, layoffs. Market's lowered expectations. Price target of $50, not much left.

It reports later today and he's nervous. Has bad news been priced in? Probably. The last report wasn't good and last week they announced staff cuts, which you don't do if you're in a position of strength. Trades at 12.5x forward PE and pays a 3.5% dividend as estimates have declined since the last quarter. A consistent company, but there's still room for downside.

It reports later today. Trades at 12.6x PE. Will they announce more cost cuts and layoffs? She doesn't feel good about earnings today. At least shares haven't run up before the report. They're spending more on AI than their network, so their growth isn't linear. You can hold this for a long time, but there will be fits and starts.

They gave poor guidance last quarter over fears that AI will take revenues from tech budgets. But this week they partnered with Nvidia. He wants to hear them talk about that next week on the investor call. There's a chance for them to get back on their feet. Their next quarter is make or break. The new Nvidia partnership is important.

Buying Splunk means there's an excess of employees. 50% of free cash flow will buyback shares and raise the dividend. There's still $10 billion of buybacks to come. He doesn't expect much next week with their earnings, but still likes it long term.

Once a tech darling, but has fallen from grace as innovation slowed and is not growing as fast as its peers (Juniper Networks, Arista). It's been rangebound the past decade and pays around a 3% dividend. Despite that, there are better ideas. Are growing earnings at only 7% compound.

Transitioning from router hardware to software and services, as revenues are recurring with higher margins. A pass, as current environment will impact companies' capital spending. Hardware still majority of its business. New acquisition may make revenue less cyclical.

A few weeks ago, it gave disappointing guidance, so shares declined. Now that the reset is done, shares are rebounding with nice momentum. This remains a steady-eddy dividend payer.

It's over its skiis, overpaying for cybersecurity assets, so he sold it. It's a great name, but he see better earnings elsewhere in tech.

Wait two quarters before this shows decent growth, though some investors may not wait that long.

It had a bad week last week but is ready to recover.

CSCO is seeing similar industry issues that other companies are seeing which essentially has been a buildup of product at end customers who are now focusing on deployment in the short-term as opposed to buying new product, alongside some general macro pressures.  It is not a name that excites us a whole lot and has been appearing to lose market share to competitors over the years. With that said, as a large, slower growth company trading at 12X forward earnings and with a dividend, it might not be our 'favourite' name out there but hard for us to be overly critical of it at these levels as well. It has underperformed, and the recent earnings miss will likely keep it quiet for at least a couple of quarters. We would thus consider it OK but not good enough to add to at this time. 
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Reported today and shares slumped after hours. They reported solid results, but guidance was not pretty for the current quarter and full year, $12.6-12.8 billion in revenue vs. the expected $14.2 billion forecast. But there's a lot of developments in the pipeline for 2024.