CSCO

Cisco’s Fiscal Third-Quarter Results Better-Than-Feared

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“One major criticism that we always hear about value investing is ‘what’s your risk management, how do you know when you’re wrong’? Well, a great value investor gives himself a margin of safety, in other words you don’t have to know how much a fat person weighs to realize they’re overweight. Like John Keynes said ‘It is better to be roughly right than precisely wrong.’ If you come to a conclusion that a $100 stock is trading at $65, even if you’re overestimating the stock’s value by 25%, at $81.25 there is still plenty of room for the stock to appreciate to $100.” — The Irrelevant Investor The discounted cash-flow (DCF) process is one of the most informative paths to … Read more

Thank you…

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By Brian Nelson, CFA Earlier this week, I received an email from a colleague and valued member of our services. I wanted to share it here for others to read. I haven’t included his name, but if he wants me to, I can add it in. It is filled with wisdom, experience and kindness. And it really made my year to read his words. The Valuentum community, I believe, is the best community of investors out there. Sir, if you do happen to read your own email on our site, we very much have appreciated your feedback, and we hope to continue to live up to your praises. We are dedicated, and our team has been rejuvenated by your words. … Read more

Three Reasons Why Dividend Growth Investors Are Quite Savvy

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A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

Cisco’s Investor Update Reveals Challenges

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On Thursday, switching and routing giant Cisco (CSCO) hosted its 2013 Financial Analyst Conference, and management’s commentary during the meeting wasn’t encouraging. The firm’s fiscal first quarter 2014 results, released mid-November, had showcased significant order weakness (see here) and commentary on the company’s fiscal first-quarter conference call indicated that the firm did not anticipate material improvement in its order growth during the second quarter, but CEO John Chambers’ reiteration of his view today that emerging markets remain “extremely challenged,” particularly in Brazil and Russia, has sent shockwaves across much of the networking industry. It appears the market had been building in expectations that some order stabilization would occur at this point during the quarter, and Chambers comments may have mitigated … Read more

Cisco’s Outlook Comes up Short; Shares under Pressure

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On Wednesday, networking giant Cisco (CSCO) reported mixed fiscal first-quarter results (ending in October), and the company’s order performance in the period and fiscal second-quarter guidance came up short versus expectations. Revenue in the fiscal first-quarter dropped 2% year-over-year, but non-GAAP net income and earnings per share advanced 11.6% and 10.4%, respectively, from the prior-year period. Non-GAAP diluted earnings per share of $0.53 came in a few pennies better than expected. Net cash from operations advanced to $2.65 billion from $2.47 billion in the year-ago period, while capital expenditures expanded to $315 million from $265 million. Free cash flow was $2.3 billion, or 19.3% of sales (a strong figure). Cash and investments totaled $48.2 billion and short and long-term debt totaled … Read more

Finisar Sees Margins Surge on Telecom Demand

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After posting a strong end to fiscal year 2013, fiber-optics maker Finisar (click ticker for report: ) registered fantastic results for its fiscal 2014 first quarter Thursday. The firm set an all-time quarterly revenue record of $266 million, up 9.3% sequentially and exceeding consensus estimates. Earnings per share on a non-GAAP basis soared 55% year-over-year to $0.31 per share, in-line with consensus expectations. The boom in telecom carriers like AT&T (click ticker for report: ), Sprint (click ticker for report: ), and T-Mobile (TMUS) investing in 4G LTE technology helped lift demand during the first quarter. Telecom had been an area of weakness during the firm’s fourth quarter. CEO Eitan Gertel added some commentary on the products driving first-quarter strength … Read more

Was Cisco’s Fiscal Year 2014 Guidance a Red Flag?

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Technology heavyweight Cisco (click ticker for report: ) reported solid results for its fiscal year 2013 fourth quarter Wednesday afternoon. Revenue increased 6.2% year-over-year to $12.4 billion, a touch above consensus estimates. Earnings-per-share was also strong, increasing 11% year-over-year to $0.52, also a few cents above consensus expectations. Free cash flow for the fourth quarter tallied $3.7 billion, equal to an impressive 30% of total revenue. For the full-year, free cash flow was $11.7 billion, or 24% of revenue. Cisco has been one of our better calls in the land of technology. Below, please find our rating track record of the firm (listed most recent to least recent). Our rating history for each firm in our coverage universe can always be found … Read more

Ciena Surges on Robust Telecom Spending

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After Cisco (click ticker for report: ) CEO John Chambers hinted at an acceleration in enterprise spending, network specialist Ciena (click ticker for report: ) reported much stronger than anticipated second quarter results Thursday. Revenue jumped 6% year-over-year to $508 million, smashing consensus expectations. Non-GAAP operating profit was halved to $0.02 per share, but that was better than the expected loss. On a GAAP basis, the firm still lost $0.27 per share. Cash flow for the year isn’t great as the company greatly expanded its accounts receivable, but we figure this will even out as the year progresses. What drove growth during the quarter? We’ve identified a few factors. Capital investment from the American wireless carriers is returning, even if the … Read more

Cisco Surges On Solid Revenue Growth

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Network switch maker Cisco (click ticker for report: ) reported solid fiscal third quarter results Wednesday afternoon, marked by strong revenue growth. Revenue increased 5% year-over-year to $12.2 billion, exceeding consensus expectations. Earnings were also above consensus estimates, growing 6% year-over-year to $0.51 per share on a non-GAAP basis. Free cash flow rose to $8 billion, up significantly from the $7.5 billion the firm generated in the first 9 months of fiscal year 2012 (Image Source: Cisco). Performance was strong across all geographies, with the Americas region boasting 10% revenue growth and robust gross margins. For the first time in recent memory, the firm’s US public sector business grew at 5% thanks to strong demand from education and state/local governments. The firm’s … Read more

Cisco’s Strong Performance Continues in the Second Quarter

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After experiencing a revitalization in fiscal year 2012, tech giant Cisco (click ticker for report: ) reported terrific results for its fiscal year 2013 second quarter. Revenue jumped 5% year-over-year to $12.1 billion, slightly better than consensus estimates. Earnings, on a non-GAAP basis, increased 9% year-over-year to $0.51 per share (Image Source: CSCO).   Cisco produced solid revenue growth across most segments, particularly wireless and data centers, which grew 27% and 65%, respectively. After admittedly being behind the curve for the first few years during the shift to wireless, the firm has focused on high-return internal investment and strategic acquisitions to help shift its position in the marketplace. We don’t see mobility slowing down anytime soon, and we anticipate that … Read more