Can Cisco Systems (CSCO) save Tech?
All eyes are on Cisco (CSCO) today as the market awaits its earning announcement. Most analysts are expecting the company to post impressive numbers as evidence by its recent run up. The entire technology sector will be affected by how CSCO performed. If CSCO delivers, the technology sector should rally tomorrow. However, if CSCO disappoints, watch out as the entire technology sector could sell-off. We remain bullish on Cisco over the long term, but the recent run up is a little concerning. The expectation might be too lofty for CSCO to deliver.
Cisco need to come up big with forward guidance that is also impressive. Based on Cisco’s pattern, we believed CSCO will top expectation, but will take a cautious view in terms of forward guidance. If so, this can disappoint investors and the stock could actually drop tomorrow. However, we hope CSCO can see far enough into the future to provide the market with a nice guidance. Our position is always to be cautious anytime a stock has been on a tear; bad thing could happen when there are too much expectations built into the stock.
As we stated on many occasions, we like CSCO’s prospect over the long term. We believed this company is truly back on track. While we do not expect CSCO valuation to ever return to the days of the dotcom, this company will continue to dominate the networking sector. The next couple of days would not be a good time to acquire this stock as we expect it to be volatile. With that said, we will be looking to acquire more shares of CSCO whenever there is a weakness in the overall market. Our hope is we can get more CSCO at around $25 per share.
Comments
Yahoo!!!!
I think the company has got good potential. It is a great website for creating brand awareness, equity and loyalty. I have high hopes with Panama too.
Posted by: aaa | February 6, 2007 01:11 PM
We are bullish about Yahoo! as well. At current level, it is certainly not very risky. However, I would caution people not to get too excited about Panama as it might not be that great. It is unproven technology. While their internal test might showed increased revenue, our concern is there might be too much expectation for the technology.
Posted by: ibooyah | February 6, 2007 01:26 PM