ACIA

Cisco Systems’ Financials Remain Pristine, Growth Outlook Improving

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Image Shown: Shares of Cisco Systems Inc initially moved lower after the firm reported its latest earnings update and management provided near-term guidance that disappointed investors. However, shares of Cisco Systems quickly resumed their upward climb as the tech giant’s financials remain rock-solid. We continue to be huge fans of Cisco Systems. By Callum Turcan On May 19, networking hardware and enterprise software giant Cisco Systems Inc (CSCO) reported third quarter fiscal 2021 earnings (period ended May 1, 2021) that beat consensus top- and bottom-line estimates. The firm’s GAAP revenues grew by 7% year-over-year and its GAAP operating income moved higher by a little over 1% year-over-year, with its ‘Security’ offerings leading the way as that segment’s revenues grew by … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

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Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process

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With prudence and care, the Valuentum Buying Index process and its components are carried out. Our analyst team spends most of its time thinking about the intrinsic value of companies within the context of a discounted cash-flow model and evaluating the risk profile of a company’s revenue model. We have checks and balances, too. First, we use a fair value range in our valuation approach as we embrace the very important concept that value is a range and not a point estimate. A relative value overlay as the second pillar helps to add conviction in the discounted cash-flow process, while a technical and momentum overlay seeks to provide confirmation in all of the valuation work. There’s a lot happening behind the scenes even before a VBI rating is published, but it will always be just one factor to consider. Within any process, of course, we value the human, qualitative overlay, which captures a wealth of experience and common sense. We strive to surface our best ideas for members.

Our Fair Value Estimate for Cisco Remains Unchanged at $51 Per Share

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Image Shown: Cisco Systems Inc continues to focus on rewarding shareholders by deploying its sizable free cash flows towards dividend payments and share repurchases. We are big fans of the tech giant. Image Source: Cisco Systems Inc – First Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan On November 12, Cisco Systems Inc (CSCO) reported first quarter earnings for fiscal 2021 (period ended October 24, 2020) after the market close that beat both consensus top- and bottom-line estimates. Though its GAAP revenues and GAAP net income fell by 9% and 26% year-over-year, respectively, the market was assuming the worst given the headwinds Cisco is facing due to the coronavirus (‘COVID-19’) pandemic. More importantly, Cisco’s fiscal second quarter guidance … Read more

Cisco Remains a Free Cash Flow Cow Supported By a Solid Net Cash Position

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Image Shown: A breakdown of Cisco Systems Inc’s revenue as of the end of its fiscal 2019. Image Source: Cisco Systems – Fiscal 2019 Annual Report By Callum Turcan On November 13, Cisco Systems (CSCO) reported first quarter earnings for its fiscal 2020 (period ended October 26, 2019) that saw shares of CSCO sell off on November 14. That was likely due to the weak guidance management put out for the second quarter of the firm’s fiscal 2020, but we continue to like Cisco’s quality free cash flows and net cash balance. Cisco’s GAAP revenues came in at $13.2 billion last quarter, up 1% year-over-year, and that growth rate rises to 2% when excluding sales related to the divestiture of … Read more

In the News: Second-Quarter Earnings Season Begins

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Second-quarter earnings season is upon us. The markets aren’t expecting much growth. Core industrial names may not fare well, but thus far, big pharma is solid. We’re not making any changes to the newsletter portfolios. By Brian Nelson, CFA We’re off to the races with second-quarter earnings season. The markets aren’t expecting much, with the consensus for S&P 500 (SPY) companies to experience a 3% earnings decline, according to FactSet. If this happens, this would mark the first time S&P 500 companies, in aggregate, would have posted year-over-year declines since the first half of 2016. The markets have rallied considerably since then, and despite the strong earnings expansion aided in part by corporate tax cuts, the 12-month forward P/E ratio … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Cisco Systems Expects Revenue Growth Will Resume This Fiscal Quarter

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Image Source: Cisco Systems Inc – Second Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan On February 9, Cisco Systems Inc (CSCO) reported second quarter earnings for fiscal 2021 (period ended January 23, 2021) that beat consensus top- and bottom-line estimates. Additionally, Cisco Systems raised its quarterly dividend by about 3% on a sequential basis in conjunction with its earnings report. We include Cisco Systems in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios and continue to like exposure to the name. As of this writing, shares of CSCO yield ~3.1% on a forward-looking basis, and our fair value estimate stands at $51 per share of Cisco Systems. Earnings Overview Cisco Systems’ GAAP revenues were broadly … Read more