Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, networking giant Cisco Systems
With that in mind, let's take a closer look at Cisco's business and see what CAPS investors are saying about the stock right now.
Cisco facts
| Headquarters (founded) | San Jose, Calif. (1984) |
| Market Cap | $127.7 billion |
| Industry | Communications equipment |
| Trailing-12-Month Revenue | $40.04 billion |
| Management | Chairman/CEO John Chambers CFO Frank Calderoni |
| Return on Equity (average, past 3 years) | 20% |
| Cash/Debt | $39.86 billion / $15.3 billion |
| Competitors |
Juniper Networks Hewlett-Packard Alcatel-Lucent |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 95% of the 9,422 members who have rated Cisco believe the stock will outperform the S&P 500 going forward. These bulls include AlphaCenturion and sjf2005.
Just last month, AlphaCenturion tapped Cisco as a solid future income opportunity: "[T]ech is starting to heat up again and their recent dividend announcement should drive some institutional buying. Provided we don't slip into another bear market I think you can expect to see Cisco make up a lot of lost ground over the next several months."
Cisco's dominant competitive position and $40 billion cash hoard -- some of it which will now be shared with shareholders in the form of dividends -- continue to support its four-star status. Thanks to its massive scale and high customer switching costs, Cisco's five-year average operating margins (23%) easily top those of networking gear rivals HP (9%), Juniper (3%), and Alcatel (-12%), as well as data-center server foes IBM
With the shares down about 15% over the past six months, CAPS member sjf2005 thinks Cisco is a timely opportunity, to boot:
This leading networking and communication device supplier will continue lead innovation in the data equipment and service industry. CEO John Chambers has built up a $39.1 billion war chest of cash on the balance sheet for strategic acquisitions and to eventually institute a dividend before he leaves. ... Rock-solid management has improved or maintained respectable positions on nearly every metric [year-over-year] since the tech bubble, when shares were trading at 94x earnings. Now shares are on offer for roughly 10x fwd earnings estimates. I say buy.
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