Internet backbone builder Cisco Systems
After the news comes out, we'll have time aplenty to dissect it. But in these few hours before we begin obsessing over Cisco's short-term progress, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 28,000 investors for their views on more than 4,000 companies, Cisco among them. Here's what Fools have to say about the company.
Up or down?
More than 2,800 investors have submitted opinions on Cisco Systems. The verdict: All systems go.
Among CAPS investors generally, and the ultra-skilled investing subset of our All-Star players in particular, Cisco scores a 94% approval rating. That's good enough to earn this Internet icon four out of five possible CAPS stars.
It's also good enough to put Cisco near the head of the pack of its networking rivals on CAPS:
|
Networking & Communication Devices group |
|
|---|---|
|
Silicom |
***** |
|
Cisco |
**** |
|
Echelon |
**** |
|
Packeteer |
*** |
|
Riverbed Technology |
*** |
|
3Com |
** |
|
Juniper Networks |
** |
Wall Street vs. Main Street
As enthusiastic as Main Street feels about Cisco, Wall Street is more so. Not one of the 16 analysts we track on CAPS thinks Cisco will underperform the market. It's not a surprising opinion, given that the firm has in fact outperformed the S&P 500 by about 15 percentage points over the last 52 weeks.
Bull pitch
The top-ranked CAPS pitch in favor of Cisco goes like this:
I'm in the process of replacing all the Cisco equipment I bought in 1999-2000, and I suspect a lot of other companies are doing the same. Their products carry a premium price, but I'll gladly pay it for their high reliability and top notch support. They've been a little slower to innovate compared to some smaller players (in areas such as bandwidth management), but due to their size, I think they'll be able to catch up quickly. I deal with technology vendors on a regular basis as part of my job, and I can't think of any that measure up to Cisco in the area of support. Support is a key differentiator for a small to mid-sized business, and there are a lot of us out there. I think Cisco is going to see a lot of repeat business in the replacement cycle that should be happening right about now.
Bear pitch
To which the top-ranked bear argument replies:
While I like the fundamentals in the underlying company, the reality is everything working in Cisco's favour is already factored into share prices. Bulls point to numerous factors as to why you should own this company, but the reality is, no bears or neutrals are left to convert and that is exactly what the charts are saying. Everybody who wants to buy Cisco already has so only profit takers are moving this stock. Until we start seeing a new catalysis, shorts and bears are going to dominate in every rally.
Who said that?
Wow. I've got to say that these are two of the most cogent arguments I've yet seen on CAPS in our top bull/bear feature. Bulls argue the business, while bears argue the stock. And the thing is -- they just may both be right!
To learn the identities of the wise Fools who penned these thoughts, and explore the plethora of additional financial data we've put together on the company, just click here.
Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 513th out of more than 28,000 raters.
