Thursday, September 26, 2013

Bits and Bytes


It's been a busy fall. I apologize for the few number of posts over the past few months. One area I haven't written too much about, but where value still exists, is large cap technology companies. Cisco (CSCO) is a company I've owned since the summer of 2011. I mentioned it here . While CSCO has since run +50% from $16 to $24, it still has steam. CSCO, is the industry's 700 pound gorilla. They dominate many of their markets in networking, processing and data storage. Data storage has been a huge growth area for the company, along with wireless and video technology. You probably use a Cisco router and/or cable box in your home. Your online files, might be sitting on a CSCO server farm. The industry is seeing huge growth in data moving across networks. Industry sources, indicate that network traffic will increase 17X over the next 7 years. The explosion of smart devices, networking and data, will provide steady demand for CSCO and it's competitors. CSCO has been chalking up better earnings in 2012 and 2013. They are on track to earn $2.05 this year, and $2.25 next year, combined with continued share buybacks and a hefty dividend, I expect double digit total returns going forward. The current dividend yield is 2.8% and growing. CSCO is good value right here around $24.

Here is a clip of CSCO CEO John Chambers and Google Chairman Eric Schmidt ( a big user of CSCO gear ), discussing the industry and rapid growth in data.

click here

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