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Cisco Systems, Inc. (CSCO), Microsoft Corporation (MSFT): One Prominent Investor Is Backing

Related tickers: Cisco Systems, Inc. (NASDAQ:CSCO), Microsoft Corporation (NASDAQ:MSFT)

Hedge fund manager Jean-Marie Eveillard has been in finance for more than half a century; first with Societe Generale before taking over the SocGen International Fund. But through a convoluted history that started with S. Bleichroder in Berlin in 1803 through 1999 when Arnhold and S. Bleichroder acquired a majority share in Societe Generale Asset Management Corp, Eveillard finally found himself the portfolio manager for First Eagle Investment Management, part of the $28 billion First Eagle family of funds.

The fund invests heavily in technology, basic materials and finance, and the first five positions in its equity portfolio reflect this strategy.  Let’s take a look at this “fab five,” via First Eagle’s latest 13F filing with the SEC.

Cisco Systems, Inc. (NASDAQ:CSCO)

At number one is Cisco Systems, Inc. (NASDAQ:CSCO), with a current value of $907 million in the fund’s equity portfolio. The network designer and manufacturer fell in sympathy with the rest of the network-equipment sector at the end of last week when F5 Networks, Inc. (NASDAQ:FFIV) cut its guidance for the current quarter. But for the investor looking for a value in the tech sector, Cisco Systems, Inc. (NASDAQ:CSCO) is the better buy against competitors Ericsson and Juniper. Cisco Systems, Inc. (NASDAQ:CSCO)’s trailing price-to-earnings ratio of 12.0x versus 19.0x for Ericsson and 50.3x for Juniper puts its shares ahead of the pack, so to speak. It’s easy to see why Jean-Marie Eveillard is so bullish.

Second on the list is Comcast Corporation (NASDAQ:CMCSK), with a $856 million position in Marie Eveillard’s equity portfolio. The acquisition of NBC helped diversify Comcast Corporation (NASDAQ:CMCSK) from being just a cable company to a global media and technology company. Recent earnings improved 12% and, with a reduction in the percentage of sales devoted to cost, Comcast’s bottom line improved 47% from 2011.  In addition, the stock is priced at a mere 2.1 times book value, versus the rest of the sector’s 4.3x average.

Third of the top five is SYSCO Corporation (NYSE:SYY), the food service provider with a market cap of $20 billion. Since 2010, Eveillard has increased his position in SYSCO Corporation (NYSE:SYY) by 207%. The stock has performed very well since the start of the year, gaining 12% to a new 52-week high of $35.62. Recent gains are attributed to the company’s estimated EPS growth rate of 7.47%. Fourth-quarter earnings showed a 7.8% increase in revenue, although an 8.7% increase in COGS caused the bottom line to deteriorate slightly to $1.1 billion from $1.2 billion in 2011.

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