Buy Alert: Cisco Systems (CSCO)

TRADE INSTRUCTIONS
Date: 
December 21, 2016
Name: Cisco Systems, Inc.
Symbol: CSCO
Type: Open
Limit: Buy below $31.50

TRADE TARGETS
Holding Period: 
6 months
Target Return: 17.4%
Annualized Return:
 34.8%
Target Price: $37.00
Stop Loss Level: $27.50

Cisco Systems, Inc. delivers integrated solutions to develop and connect networks around the world. The Company delivers its technology and services to its customers as solutions for their priorities, including cloud, video, mobility, security, collaboration and analytics. Link to company website.

TRADE RATIONALE

It’s impossible to predict exactly which sectors and companies will end up being the biggest winners from president-elect Donald Trump’s promise to undertake a massive infrastructure spending program. But it’s likely that Cisco Systems will be one of the primary indirect beneficiaries, given its extensive reach into virtually every form of the cloud-based networked computing platforms that will be required to support those projects as expressed in this recent industry survey.

There is no denying that CSCO has mostly missed out on the recent stock market rally due to its flat revenue and mildly declining earnings over the past year (-4.4% YOY), but that means it is currently priced at only 12 times forward earnings so it earns an IDEAL score of 8 (on a scale of 0-10, higher is better). CSCO also earns the highest score possible from one of the most reliable indicators of our Rapid Profits Matrix based on the strong cash flow resulting from its huge sales revenue.

I don’t expect CSCO to shoot up overnight, but it just crossed over its 50DMA and has formed a solid base above $29 so I don’t see much downside risk in getting into this name now. And once details of Trump’s spending plans become better known this stock may take off quickly so I am getting into it now to make sure we reap the full benefit of whatever move occurs over the next six months.

NOTE: CSCO is optionable

Stock Talk

Rick

Rick

In at 30.57.

Abhijit D

Abhijit D

I have been a long term cisco stock holder as i am in the same profession. As i see, there are other big/small names that have bit into Cisco’s revenue. What do you think about Juniper, PaloAlto, Arista, etc. The orgs i have worked (some big names) and talking to colleagues tech infra is not Cisco ruled anymore as there are these smarter and cheaper device options. Shouldnt these other companies be fighting for a slice of Trumps infra spending?

Gompps

Gompps

In at $30.4565. Also purchased CSCO 07/21/2017 32.00 C at $0.91.

black arrow

black arrow

Hi Jim,
Thanks for another recommendation as you say it is optional I think I may have read something on it in Personal Finance awhile back – not sur.
Here is the Option I have: it is 212 days til expiration CSCO Jul 21 2017 30 Call. The call is ITM.
I think I will watch and wait for stock price to go down a bit and then get some stock as well. Take heed I am not a great Options trader folks. Here is a link to my chart: http://schrts.co/XYNt6K

My good news was knowing what I know about indices here is your tip for day members when an indicie is in the red, 4 out of 5 stocks in that indice are too. My good news is I got my garage door unstuck from the ice, and now my wife vehicle can see the light of day. I did this since all indices are red – but being obsessive I checked Systematic wealth too.

John Elgin

John Elgin

This is not what I signed up for. I can’t afford to have my money tied up for that long with that kind of return.

black arrow

black arrow

Hi John,
Don’t be discouraged too soon, In a relatively short time I have seen trades Jim has given us recommendations for bring in a nice profit in under a month.

Remember there is another train every 15 minutes as ‘they say”

Roger Hill

Roger Hill

Bought CSCO170617C31 for $1.24

Roger Hill

Roger Hill

Oops.That’s CSCO170616C31 for $1.24

Larry Johnson

Larry Johnson

Already a holder of CSCO.
Bought at $28.35 sometime way back in June and been sucking the dividends and price rise off it ever since.
Thanks, Jim.

Maria R

Maria R

Thanks, Jim, black arrow, Roger and Gompps.
Had Csco from before. But now trying to buy the call. New at buying calls, usually selling them.

greenmaster

greenmaster

My Play on this stock will be the 2018 Jan 35 Call. There fairly cheap right now. Closed yesterday at .79 Cents. I will do 20 Contracts for now and If It starts 2 rise, Bump the quantity Upwards. I’ll be honest. I can’t buy all these stocks that keep coming along. I will take my chances for a while on the option arena and If things work out, then I’ll start doing more stock Trades. I’ve invested a good bit of money into the Matrix system program that was just offered. Need 2 get the money back b4 venturing any further into even more advisor programs. Lets make some money b4 we do anything else. I saw an ad on the homepage of this site about 29 stocks to sell right now? Wonder what those issues are? Please advise if U can. Thanks.

Jim Pearce

Jim Pearce

Those stocks are the ones that currently earn a score of ‘0’ from my IDEAL Stock Rating System. The S&P 500 Data Table with scores for every company in the index can be found on the Personal Finance website (http://www.investingdaily.com/personal-finance/portfolio/dynamic/spx-stocks/).

greenmaster

greenmaster

I took a wild card position on CSCO. Bought 100 Contarcts. Apr. 35 Calls. 7 cents.

greenmaster

greenmaster

I don’t know if anyone will see this, But there is a very good possibility on CSCO calls. Stock is slowly heading up. Earnings due 2-15-17. There may be an excellent play on THE MAY 35 CALL. If the stocks moves up just $1-$1.50 above the current stock price, the Option will at least double in Value. Then to make it even tastier, a 2 point gain or a little more could increase the option value 5-6 times the current value. Pretty awesome rate of return. We’re looking at a possible 100-600% gain on this option play. That would be so awesome if it works out. I’m betting it will. I own 285 calls so far. I’m spread out from the 32-36 price range. There U go people. Good luck.

Derek: Las Vegas, NV

Derek: Las Vegas, NV

I think CSCO will be a good call as well GM, I had bought Jun $35 calls. Hopefully it will work out for us! 600% gain would sure be nice. 🙂

Derek

greenmaster

greenmaster

One thing I’m going to do with CSCO next week is to buy some puts to protect myself against the calls if the stock doesn’t move ahead. I have a huge position on this one and I don’t want to come up short. Now if the stock takes off, the price I pay for the puts will be peanuts compared to the possible gain. They bought APPDYNAMICS and that should help them grow their earnings handsomely in the future. So the future does look bright for them. So at the moment, there are no clouds to overshadow the stock and the sun is shining brightly. Go, Go, Go CSCO!!

Derek: Las Vegas, NV

Derek: Las Vegas, NV

How’s that return on CSCO looking for you?

Derek

Derek: Las Vegas, NV

Derek: Las Vegas, NV

Up 106.65% on CSCO. Now the decision to cash out or let it run. Hmmm, decisions, decisions!

Derek

black arrow

black arrow

Hey Cisco Hey Pancho,
It is not time to ponder when the candle is above the upper Bollinger band.
Cheers

Rick

Rick

I sold my calls today when I reached a 140% profit. Bought June calls with 31 strike at 1.31, sold them today at 3.25. Thank you very much Mr. Pearce.

greenmaster

greenmaster

Hello Derek. So far CSCO has been a big winner for me. As I said, I have a huge position on it. I’ve been loading up on it since December. I’ve been playing it all along. I reached a peak of about 400 contracts on it. I turned a lot of them and now I am sitting on 300 contracts and they are all free. I made enough money on all the contracts I had and in the end here, I have 300 freebie’s. That means all have been paid for and the returns provided enough money to leave me with 300 to keep going. That calculates to some serious money coming in now that the stock is up again today. All green from here. The rate of return far exceeds 100%. I did buy some puts yesterday just in case it went the other way. They also were free. At this point I have no money of my own invested in the contracts. So it doesn’t matter which way it goes. I bought a lot of AAPL calls as well and the story is the same with those also. Up. Up, and away!! WOW!!!

Jim Pearce

Jim Pearce

By now I’m sure most of you know that we got the result we wanted out of last night’s quarterly earnings report from CSCO (http://finance.yahoo.com/news/cisco-reports-second-quarter-earnings-210500387.html), and the stock is up nearly 3% this morning after already having risen in the days leading up to the report. As you can see from the comments below, some of the call option trades have already paid off handsomely, but I have a target price of $37 for CSCO and still four months left in my target holding period so I am leaving this position open. I may raise the stop price if CSCO rises to the point that we have a 100%+ annualized return in it, but we are still a couple of points away from that so for the time being I am not making any changes to this recommendation.

Frank B. Las Vegas

Frank B. Las Vegas

Thanks again! Jim, Appreciate the encouragement took some profit. Looking for a new position CSCO to leverage.

Derek: Las Vegas, NV

Derek: Las Vegas, NV

Frank, you’re in Las Vegas as well?

Frank B. Las Vegas

Frank B. Las Vegas

Derek, yes sir work on the strip out of CZR.

Frank B. Las Vegas

Frank B. Las Vegas

Derek, With desire to learn and grow. Appreciate the input on positions on the Stock Talk. Thanks to all!

Derek: Las Vegas, NV

Derek: Las Vegas, NV

Of course, happy to help. Are you going to the Money Show held at CZR in May? I’m signed up for it already, you should go as well, it’s a free event. The Traders Expo that was held at CZR a couple months ago was very educational. I’m also thinking about joining the Las Vegas investment club, maybe it’s something we could check out together.

Lets get together at some point. My email is myersd8@yahoo.com. I look forward to hearing from you.

Derek

greenmaster

greenmaster

You’re making a wise decision to hang on to CSCO for a while yet. From what I heard the other day on CNBC, CSCO is headed to much higher ground. I still have all my OPTIONS on it. I am hanging onto them for the time being. Waiting it out. I have loads of time left on them, so the big score is coming. Even if the market pulls back CSCO will most likely hold it’s own and then resume the northbound trail. There U go!! Thanks.

Maria R

Maria R

Sold my CSCO calls today bought @ 1.29 sold @3.70. Thanks, Jim, Black Arrow, Roger and Gompps.

This is the first call I have bought in a long time.

Now I ask: is it better to exercise the call? (margin is not a problem at this point) I am still below Jim’s limit of 31.50.

Thanks for all your input.

Mitigated my loss in AFSI and JONE

black arrow

black arrow

,Id say preserve your capital by continuing to buy calls.

Maria R

Maria R

Thanks, balck arrow

Maria R

Maria R

sorry for the typo, blackie.

black arrow

black arrow

no problem I am a very poor keyboardist and hard to get past looking at the keyboard. Going WAY BACK typing was only subj I flunked 4 X in a row :(. I am dioin better now. Here is an actual Options VS stock in my acct:
symbol T have 100 shares of stock cost me at time $4105.00
This AM I BTO [3] contracts T May 39 calls cost me a tot of $945
and good news is already up 6.82% where stock is dn a little

Jim Pearce

Jim Pearce

For those of you still in CSCO, needless to say yesterday’s quarterly earnings report was disappointing (https://finance.yahoo.com/news/cisco-revenue-falls-sixth-quarter-201215316.html). My target holding period is up this weekend, so I am watching it for signs of near-term direction after this morning’s big drop on the opening. Of course, yesterday’s overall market selloff didn’t help and I don’t see pressure from the Trump situation abating unless the special counsel has completed his work, so I don’t expect much help from the market. Stay tuned.

Dramatic License

Dramatic License

Thanks, Jim, that is helpful. I missed the earnings report. Yesterday was awful and it seems we are caught in the overall market movement.

Frank B. Las Vegas

Frank B. Las Vegas

Thanks, Jim, please keep us posted!!!

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