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CSCO, Anyone Buying
Old 06-26-2011, 06:24 AM   #1
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CSCO, Anyone Buying

I am thinking of buying at current price, $14.93 as a longer term hold. I read the previous listing and just wondered if anyone has changed their minds as the stock has feel further.

Of course, the overall outlook on the market is rather dreary at this time so imagine things could get worse for CSCO before getting better.

BTW, anyone have any thoughts on a small gold stock, Sandstorm Resources, LTD, SSL on Canadian market.
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Old 06-26-2011, 10:30 AM   #2
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James,
Check this thread. It went up to May, and concerned Cisco (CSCO).
Just read an article in informationweek about Cisco Telepresence system cost being lowered significantly.
Can't interpret this for you, though. FYI, son has CSCO stock, and I advised him to hold when $25, as I was sure it would go to $35.
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Old 06-26-2011, 05:26 PM   #3
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I just wondered if interest is picking up with the stock at under $15.00.
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Old 06-26-2011, 06:08 PM   #4
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I have to agree with Ralph Nader of all people about CSCO according this WSJ article.
Quote:
Ralph Nader, the scourge of American business and onetime presidential candidate, has found his next corporate demon: Cisco Systems Inc...
Mr. Nader isn't calling for a router recall or claiming the company's networks are unsafe at any speed. Instead, he wants the tech company to pay a bigger dividend to boost its shares.
The consumer advocate's motives are far from altruistic. He is a longtime disgruntled Cisco investor who called the company's share performance "appalling." In a private letter to Cisco Chief Executive John Chambers sent June 13, Mr. Nader blasted the CEO for not doing enough to lift shares of the technology company and said "it is time for a long overdue Cisco shareholder revolt against a management that is oblivious to building or even maintaining shareholder value," according to the letter..


Among the specific actions Mr. Nader suggested in the letter are the distribution of a one-time dividend of $1 a share and an increase in Cisco's annual dividend to 50 cents from 24 cents.
"If they can't give shareholders value, then they have to give cash," Mr. Nader said in an interview this week, adding that the company's stock has plummeted even though its profits generally were on the rise until recently.


... has been a long and painful ride for Mr. Nader as a Cisco shareholder, he said. He first bought Cisco shares in 1995 at an adjusted price of $7 and currently owns 18,000 shares, he said. In 2000, his Cisco stake was valued at $1 million, about one-third of his $3 million portfolio. As Cisco's share price swooned in the years that followed, it has represented a smaller slice of his overall investment portfolio, which he said still is valued at about $3 million. At Thursday's closing price, his stake is valued at $278,460.
I guess one of CSCO problems is all but $5 billion of the $43 billion of cash the company has is offshore and bringing it back would require paying 35% corporate income tax. Still a $.50 annual dividend would be something the company could easily pay while it figures out something constructive to do with its off shore cash.

My plan is to write puts on CSCO at this level and also at $12.50
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Old 06-26-2011, 07:56 PM   #5
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Nice article here, with links all over the place if you want to do more reading.

I think you'll see an increased dividend, as well as more shedding. For instance, the consumers products will all go.
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Old 06-27-2011, 06:32 PM   #6
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I'm still buying.

I've seen nothing that indicates to me that they are losing their market leadership. Most large companies I've seen have almost exclusively Cisco networking gear.

Their markets have stopped growing, but they don't need to grow at this price.

I'm certainly not against a bigger dividend though
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Old 06-27-2011, 07:05 PM   #7
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I do not own any shares, sorry James.
Quote:
Originally Posted by James5v View Post
BTW, anyone have any thoughts on a small gold stock, Sandstorm Resources, LTD, SSL on Canadian market.
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Old 06-27-2011, 07:38 PM   #8
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Interesting video on Cisco on Morningstar here. Hint I find it faster to read the transcript.

I do thing a huge part of the problem is the company has transitioned from growth to a value a company. Chamber hasn't really given up on the company being a growth company, and is only paying lip service to value investor (e.g. $.06 dividend <20% payout ratio). Intel made the transition about 5 years ago, with two double digit dividend bumps in a single year in 2008 and 2011. The change it isn't really reflected in Intel stock prices but people are no longer skeptical about Intel as a value play.
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Old 06-28-2011, 08:07 AM   #9
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Intel made the transition about 5 years ago, with two double digit dividend bumps in a single year in 2008 and 2011. The change it isn't really reflected in Intel stock prices but people are no longer skeptical about Intel as a value play.
Thread creep. Keep an eye on INTC as SSDs (solid state drives) become more prevaleant in computers.
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Old 06-28-2011, 08:12 AM   #10
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It's intriguing at this price but I would be much more inclined if Chambers wasn't around.
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Old 06-28-2011, 12:42 PM   #11
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Keep an eye on INTC as SSDs (solid state drives) become more prevaleant in computers.
Check6- could you expand on what effect you expect this to have on the industry and on INTC?

Ha
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Old 06-28-2011, 05:50 PM   #12
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Since Intel is associated with CPU, and also key player in SSD development, I'd expect their future to be rosy. However, lots of competition exists. The traditional hard drive manufacturer is not rolling over.
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Old 06-28-2011, 07:09 PM   #13
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I have some; bought at $20-ish...I'd buy more, but there are so many more "good" companies to buy right now. Bought back into MSFT a few weeks ago & wallah, 6.4%...I would have been down 2.5% in the same period...

I think its interesting that everyone starts looking to drop CEOs when things suddenly go south...

Also purchased PBI & INTC recently...
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Old 06-29-2011, 08:35 PM   #14
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Quote:
Originally Posted by haha View Post
Check6- could you expand on what effect you expect this to have on the industry and on INTC?

Ha
HaHa...here are a couple of articles:



Why Intel Can’t Lose



The common wisdom of late is that Intel has irretrievably missed the mobile processor business and, therefore, has reached the end of the technology line and will slowly give way to ARM based hardware in most areas.

That opinion doesn’t hold up under scrutiny.

Intel continues to dominate the extremely demanding and very high margin PC and server CPU business while AMD continues flailing away trying to present a façade of relevance to the industry.

In the mobile business, the leader Apple is actually suing their critical supplier Samsung for a variety of reasons. Samsung, of course, is the supplier of the Apple “A” chips used in the iPhone, iPod touch, and the hot selling iPad tablet. The lawsuit is getting increasingly bitter. In this environment Samsung might be expected to choose to stop supplying Apple except the lawsuits would escalate into the intergalactic size range. As long as Apple is paying, Samsung will continue supplying….for now.

Realistically, Apple needs to find a new source for the “A” chips (and NAND flash memory, for that matter) very quickly. A careful examination of the potential alternative suppliers for the level of technology and the level of production capacity required for what could soon become demand for 200 million plus “A” chips results in a list of….one. Intel.

Some analysts suggest that TSMC could be at least a partial supplier of the “A” chips. There are a number of problems with that: First, TSMC is full. No extra capacity for a year or two. Second, TSMC’s best fab technology is no better than and probably not as advanced as Samsung’s. Third, and this is the subtle one, for TSMC to do business with an end customer (Apple) seriously violates the business model upon which TSMC was founded. That premise was to be a “timeshare” fab to other semiconductor companies who would finish, market, and support their unique products. Examples of such companies are Qualcomm, Nvidia, Broadcom, Xilinx, Altera, etc., etc. TSMC has never and likely never will sell wafers to an end customer.

Virtually all Application Processor suppliers such as Qualcomm, Nvidia, TI, etc., are dependent on TSMC or other semiconductor foundries to make their wafers.

So, it leaves Intel.

This is the way I see it playing out. Intel will very soon begin supplying the “A” chips to Apple using the proven Intel 32nm process. The chips built on this process will be the same design as currently being built by Samsung at a 40 something nm node. And they will have the ARM core, of course. The parts, due to the superior 32nm process, will be lower power allowing for longer battery life and higher speed allowing for faster web and application access.

In order for Apple to be able to get at Intel’s incredibly advanced 22nm 3D process, Apple will have to replace the ARM core in the “A” chips with the Intel Atom core which, while seen as an emotional issue by the outside world, means nothing to Apple. That move will give Apple medium term exclusivity to the highest performance and, by far, the lowest power Application Processor in the known universe. With ultra-low power performance in hand, Apple could give consumers many times longer battery life -or- make the battery smaller, lighter, cheaper and chargeable in minutes -or- either of the above in different models.

There is another subtle, but powerful point in all of this. The exclusivity to Apple comes from the reality that Intel will NOT sell to competitors such as the Application Processor makers.

In order for the mobile widget customers of the those companies such as HTC, RIMM, etc. to match the performance of Apple, they will have to come directly to Intel and use what will presumably become a line of standard product Application Processors from Intel using the Atom core.

This basically constitutes an Intel nuclear attack on ARM Holdings and all of the competing Application Processor suppliers. Since TSMC ultimately supplies the wafers for many of those ”other APs”, this scenario is not a “day at the beach” for TSMC either.

This must be the reason that Intel is building and outfitting a new fourth 22nm manufacturing facility that would be completely unnecessary if, as some say, Intel is irrelevant in the mobile IC business.

In summary, Apple could stay with the apparently hated Samsung, or move a couple of technology generations ahead with Intel and gain performance exclusivity. All this locked together by the two facts that TSMC will not sell to end user customers and Intel will not sell to competitors.

If you were Steve Jobs, what would you do?





How Intel Doubles Sales


In Why Intel Can’t Lose, I discussed how Intel could “nuke” ARMH and others and become the leading supplier of processors to the mobile business.

Another opportunity open to Intel, which they openly discuss, is Solid State Drives (SSDs).

Intel recently showed a computing “envelope” referred to as the UltraBook. This device is a proposed design for future new ultra-thin notebook computers that can also be used as a tablet computer in competition with Apple’s iPad. The UltraBook will be similar in physical format to the MacBook Air computer. I guess imitation really is the sincerest form of flattery.

Thinness will be the UltraBook’s most immediate and notable feature. At .8” total thickness the UltraBook will be too thin to have a hard disc drive for mass storage. It will have an SSD just like the MacBook Air.

OK, Intel makes SSDs. Intel makes the NAND flash memory from which the SSDs are made. Intel will supply the SSDs with the 85% of the world’s PC CPU chips that they supply now. It won’t be, “Here’s your CPU chip, and, by the way, here’s your SSD”. The SSD will be inside the CPU package!

The 64 Gigabit NAND flash memory chip used to make SSDs is about the size of a fingernail. Here’s the interesting part: The NAND memory manufacturers can now stack up to eight of these chips on top of each other! Therefore, a NAND memory chunk of 64 GigaBYTEs is now possible in the area of that same fingernail.

The other major development is Intel’s 22nm 3D fabrication technology available later this year. This amazing technology reduces power dissipation of the CPU chip to a fraction of what was possible in the recent past.

With the low power of the new CPU chip and the ultra-compact chunk of NAND memory (SSD), there is no impediment to putting both of these functions next to each other in a single small package. SSDs are inherently much, much faster than hard disc drives, and placing it physically closer to the CPU makes the system faster still. The size advantage is obvious.

So, Intel will become a supplier of “Compute Blocks” rather than just CPU chips. Since the value of even a small 64GB SSD is approximately equivalent to the price of the CPU chip and since the SSD will be included in the Intel CPU package, it will not be subject to competition.
Bingo, Intel’s sales double! This will happen over a number of years, of course, but the Intel sustainable growth rate will become obvious and predictable for many years into the future.

Intel, the sleeping giant, the “dead money” company, is waking up. This will be super good news for Intel shareholders. For some competitors, not so much.
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