Check out my latest Rising Star purchase -- Cisco Systems:http://www.fool.com/investing/value/2011/06/21/rising-star-b...Do you agree or disagree with my thesis? I'd love to hear your thoughts!
No, I wouldn't buy Cisco. In fact, I sold it about a month ago and swapped in to INTC (after writing an article back in Jan concluding that keeping CSCO was the right move - dooh - THAT would have been the time to make the swap).I agree CSCO looks dirt cheap, but what's on the horizon that's likely to make the stock start climbing? And, does CSCO really have better prospects going forward compared to INTC, MSFT, IBM and other large cap tech peers that also look cheap?I don't think CSCO will be a big loser, but I don't see what sparks a return to better valuations or why it's a better buy than some other stocks out there. In short, CSCO looks an awful lot like a value trap.If Chambers manages to get the company back on track, I think there'll be time to jump in and catch the ride.Maybe I'm not the best person to answer this since I was wrong back in Jan and have generally managed to lose money in tech.Hope I'm wrong and the pick works out for you.Fool on!RussDisclosure: As mentioned, long INTC. No position in the other stocks mentioned.
Hey Russ,I tend to agree with you that there are plenty of large tech companies that all look really cheap right now. And to be honest, I think MSFT is probably just as good a pick as CSCO is. The reason I think CSCO will jump back up is b/c I think it's downfall was a combination of losing market share in some of its core markets, but I also think wall street lost faith in management. My hope is that with the exit of consumer products, management gets more focused and gets back on track. They are also reducing overhead so hopefully that also hits the bottom line. Thanks for the response, and good luck with your INTC pick!Jordan
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