Hmm. I gather this is the point in the debate where I'm supposed to disagree with Chuck, right? Well, honestly, I can't.
He's absolutely correct: Cisco
Cisco dilutes too much, no doubt. Yet at Motley Fool Stock Advisor, Fool co-founder David Gardner routinely recommends heavy diluters -- so long as they grow profits much faster than they grow share count. Activision
And sure, Cisco is maturing. But "mature" isn't the same thing as "dead." Consider: General Electric
Based on that assumption, I've run Cisco's numbers through the Fool's Discounted Cash Flow Calculator (available for use 24/7 to all subscribers to our Inside Value newsletter). Using the 15% long-term earnings growth rate that analysts expect Cisco to achieve (and tapering that growth off over time), I see Cisco as roughly 17% undervalued today.
So I'll say it again: Cisco's on sale.
You're not done. This is just one part of a four-part Duel! Don't miss Chuck's bearish argument and rebuttal or Rich's first bullish argument. When you're done, you're still not done. You can vote and let us know who you think won this Duel.
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