Wake Up! Cisco (CSCO) Is Dirt Cheap - Barron's
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Price: $121.10 -0.6%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.7%
EPS Growth %: +18.2%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.7%
EPS Growth %: +18.2%
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Shares of Cisco (Nasdaq: CSCO) are slightly higher this morning after being highlighted on the front cover of Barron's this weekend - "Why Cisco Will Get Moving Again"
The article argues that unlike in May 2000, when they wrote that the stock was overvalued trading at a nearly $500 billion market cap and a 130x the consensus, the stock is now sharply undervalued with shares trading at about 12x this year's consensus.
Barron's states, "investors, making the opposite error they made in 2000, have priced in too much skepticism about Cisco's growth prospects and market-share position, making the stock an attractive opportunity for patient buyers."
Barron's said if the company comes close to its long-term objects of 12-17% annualized revenue growth, the stock should at least trade back to its 2010 high above $27.
Despite criticism, Cisco's CEO John Chambers said the recent shortfall, which triggered a sell-off in the stock, was not company specific.
The article also notes the company has $40 billion in cash and short-term investments and plans to initiate common-stock dividend early next year.
Shares of Cisco last traded at $19.84 in pre-open trading today, up 0.8%.
Link to Barron's article
The article argues that unlike in May 2000, when they wrote that the stock was overvalued trading at a nearly $500 billion market cap and a 130x the consensus, the stock is now sharply undervalued with shares trading at about 12x this year's consensus.
Barron's states, "investors, making the opposite error they made in 2000, have priced in too much skepticism about Cisco's growth prospects and market-share position, making the stock an attractive opportunity for patient buyers."
Barron's said if the company comes close to its long-term objects of 12-17% annualized revenue growth, the stock should at least trade back to its 2010 high above $27.
Despite criticism, Cisco's CEO John Chambers said the recent shortfall, which triggered a sell-off in the stock, was not company specific.
The article also notes the company has $40 billion in cash and short-term investments and plans to initiate common-stock dividend early next year.
Shares of Cisco last traded at $19.84 in pre-open trading today, up 0.8%.
Link to Barron's article
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