Tag Archives: JNPR

Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

Top Stories
French economy slips into recession. France slid into recession during Q1 as the French economy contracted 0.2% Q/Q after shrinking by the same amount in Q4. With unemployment at record levels and President François Hollande’s popularity at all-time lows, the country faces an uphill battle to right the ship as it struggles to bring its deficit in line with the EU-mandated 3%, while simultaneously restoring growth. Economists project a 0.2% contraction for the full year and a survey of French citizens shows just 11% believe Hollande can bring down the jobless rate by year’s end.

CBO slashes deficit estimate. The federal deficit will narrow to $642B in the fiscal year ending in September, the CBO said Tuesday — a meaningful improvement from February’s projection of $845B. The revision comes courtesy of higher tax receipts and dividend payments to the Treasury from Fannie (FNMA.OB) and Freddie (FMCC.OB).


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Is Cisco Systems’ Recent Dividend Hike A Sign Of Things To Come?

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By Alexander J. Poulos:

Cisco Systems (CSCO), the poster child of the can’t-miss stock of the late 90s, has performed rather abysmally in the past decade. The shares have been stuck in a never ending range of $12-27 for the duration of the decade, underperforming the S&P 500 index. In my opinion, a large portion of this underperformance is due to CSCO refusing to pay a dividend to shareholders. The thesis of this article will examine the investment case for CSCO today in light of the recent hike to its dividend and more enlightened capital allocation plans.

Year

2007

2008

2009

2010

2011

2012

Revenues in millions

34,922

39540

36117

40040

43218

46061

Shares outstanding in millions

6100

5893

5785

5655

5435

5298

Net profit margins

21%

20.4%

17%

19.4%

20.9%

21.7%

Return on capital

19.9%

20.2%

12.9%

14.3%

14.7%

15.3%

Return on equity

23.3%

23.4%

15.9%

17.5%

19.1%

19.5%

August 15, 2012


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Cisco: The Pullback You Wanted

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By Bill Maurer:

After Cisco Systems’ (CSCO) second quarter report in February, I encouraged investors to wait for a pullback. Cisco shares had rallied strongly in the months prior to the report, and the quarter’s results did not justify the complete rally in my opinion. After that report, shares continued even higher, as US markets have rallied to new highs. Last week, Cisco shares tumbled after a surprising analyst downgrade. Shares have lost about 5.5% since their recent high, and that provides an excellent chance to analyze a potential entry into the name.

First, the downgrade:

FBR Capital downgraded Cisco to Underperform from Market Perform, and reduced their price target on the name from $22 to $17. They issued the following statement:

"We believe Cisco will become increasingly more challenged to offset weaker-than-expected routing and switching demand as it works to transition to a more software- and service-centric business model," the


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Keep It Simple Stupid – Buy This Misunderstood Tech Name For 35% Upside

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ByJosh Burwick:

Infoblox (BLOX), a recent 2012 IPO, has exposure to almost every secular theme in technology minus a crazy multiple. Excluding a dip late last year related to lockup expiration, the stock has been mired in a narrow $18-23 range. The stock trades at 3.7x EV to 2013 revenue, not a hefty multiple for a dominant software player in a sector ready to inflect. On a relative basis, BLOX trades at a sharp discount to every comparable small-mid cap software company with similar growth. Infoblox suffers from lack of analyst coverage, no direct comparables, and confusion as to what area of technology they really occupy. Infoblox is a beneficiary of every major secular technology theme: cloud, virtualization, IPV6, network security, SDN, proliferation of connected devices, and BYOD. Yet Infoblox does not neatly fit into any of these categories cleanly. Infoblox is the second act for senior NetScreen management who executed


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