Is Cisco a Value Stock for 2013?

Page 1 of 2

Cisco Systems, Inc. (NASDAQ:CSCO)’s impressive financial performance and fairly cheap valuation have made it a popular stock pick for 2013. Read StreetAuthority’s case for Cisco. The first quarter of Cisco’s fiscal year ended in October 2012. Revenue for the quarter was up 6% from the first quarter of the previous fiscal year, primarily due to higher services revenue. With the company generally holding cost increases in check- operating expenses were actually down, though this was primarily due to lower restructuring charges- earnings swelled 18%. A modest decrease in share count helped bring earnings per share to 39 cents. Cash flow from operations was also up in the quarter, approaching $2.5 billion.

RENAISSANCE TECHNOLOGIES

Cisco Systems, Inc. trades at 13 times trailing earnings, and if we use the 39 cents per share figure from the most recent quarterly report and annualize it we get a crude P/E of 13 as well. Analyst expectations are for $1.96 in EPS for the current fiscal year, and the current stock price is only 10 times that figure. We’ve covered Cisco’s impressive cash flow generation, and when we look at the enterprise value implied by the current stock price it is only 6x trailing EBITDA- not as obviously low a multiple but still well within value territory for such a large and growing company.

59 hedge funds and other notable investors in our database of 13F filings owned Cisco Systems, Inc. at the end of the third quarter of 2012, which made it one of the most popular tech stocks among hedge funds (see the rest of the top ten). Renaissance Technologies, founded by billionaire Jim Simons, initiated a position of almost 14 million shares in Cisco between July and September (check out Renaissance’s stock picks). Billionaire Ken Fisher’s Fisher Asset Management increased its stake in Cisco by 77% to a total of 38 million shares and this made Cisco one of the fund’s top five picks (find more of Fisher’s favorite stocks). Sandy Nairn’s Edinburgh Partners was another major investor in the company.

It turns out that Cisco looks quite a bit cheaper than its peers:

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!