Hedge Funds – Where’s The Edge? Cisco Systems, Inc. (CSCO), Intel Corporation (INTC)

2). Intel Corporation (NASDAQ:INTC): Another example of a virtual monopoly, Intel has an 80% share of the semiconductor market. The giant trades at a measly P/E of 10x, and a PEG of 0.8. Last year, Intel earned more than $20 billion in cash. With this huge profit, Intel spent more than $16 billion returning capital to its owners via cash dividends ($4 billion) and share buybacks ($12 billion). In short, shareholders at Intel kept 80% of the profits. Now, That is what I call a shareholder friendly company. Shares of Intel have lagged the market by 35% (!) in the past year alone.

3). Cisco Systems, Inc. (NASDAQ:CSCO): The market dominating manufacturer of networking products is trading at a forward P/E of 10 and price/sales of 2. Cisco increased its dividend payout by 133% (!) in this past year alone. Similar to its other peers, Cisco also maintains a 23% gross operating margin.

The Fool thinks Tech

Rather than try and climb on the old hedge fund wagon, I recommend you take a look at the beaten down sector of technology companies. These are mega super safe companies trading for pennies on the dollar. I am willing to bet that any investment in these 3 companies will outperform 80% of hedge funds in 2013, without having to pay excessive fees to their managers.

The article Hedge Funds – Where’s The Edge? originally appeared on Fool.com and is written by Shmulik Karpf.

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