Will Cisco Systems, Inc. (CSCO) Shares Hold Gains or is Run-up Only Temporary?


Shares of Cisco Systems, Inc. (NASDAQ:CSCO) are up over 8% this morning after the company reported better than expected earnings and decided to increase dividends. Additionally the company announced a stock buyback program that will certainly make shareholders happy. With all this good news, comes the question, “Will these gains hold?”

While we aren’t pretending to know that answer, we have seen the stock fall fruitlessly for the past month to month and a half. It probably fell further than it should have, and this latest earnings beat has sent a message to investors that perhaps the stock is undervalued. We aren’t the only ones that believe this either. Cisco Systems, Inc. (NASDAQ:CSCO) is a stable company, one which has a lot to look forward to when it comes to contributing to the future of technology. With a P/E ration of 12.98, and the potential for mild growth, we dont’ see this stock falling anytime soon. Then again that’s just our opinion.

The stock is up 8.13% or $1.83 following the news, hitting $24.34 per share. About 903,874 shares traded hands. CSCO has declined 16.60% since July 8, 2015 and is downtrending. It has underperformed the S&P500 by 7.13%.

From a total of 15 analysts covering Cisco Systems Inc. (NASDAQ:CSCO) stock, 12 rate it a “Buy”, 0 a “Sell”, and 3 a “Hold”. This means that 80% of the ratings are positive. The highest target price is $38 while the lowest target price is $16. The mean of all analyst targets is $29.62 which is 21.69% above today’s ($24.34) stock price. Cisco Systems Inc. was the topic of 26 analyst reports since August 4, 2015 according to the firm StockzIntelligence Inc. Goldman Sachs downgraded shares on February 8 to a “Buy” rating. Barclays Capital initiated shares with a”Overweight” rating and a $32 target share price in their report from an October 14. Stifel Nicolaus maintained CSCO stock in a recent report from February 8 with a “Buy” rating. Citigroup initiated the rating on October 6. Citigroup has a “Buy” rating and a $30 price target on shares. Finally, Suntrust Robinson initiated the stock with a “Buy” rating in a report they issued on a November 24.

The institutional sentiment increased to 1.11 in Q2 2015. It’s up 0.15, from 0.96 in 2015Q2. The ratio is positive, as 89 funds sold all their Cisco Systems, Inc. shares they owned while 604 reduced their positions. 83 funds bought stakes while 683 increased their total positions. Institutions now own 3.73 billion shares which is 0.65% more than the previous share count of 3.71 billion in 2015Q2.

Edinburgh Partners Ltd holds 8.22% of its total portfolio in Cisco Systems, Inc., equating to 2.97 million shares. Tweedy Browne Co Llc owns 9.83 million shares representing 7.68% of their total US portfolio. Moreover, Bellecapital International Ltd. has 7.38% of their total portfolio invested in the company, equating to 189,997 shares. The Australia-based Platinum Investment Management Ltd has a total of 6.9% of their portfolio invested in the stock. Minneapolis Portfolio Management Group Llc, a Minnesota-based fund reported 1.57 million shares owned.

Since March 16, 2015, the stock had 0 insider purchases, and 11 sales for a total of $5.99 million in net activity. Hennessy John L sold 15,000 shares worth $435,000. Mcgeary Roderick C sold 15,000 shares worth $429,750. Capellas Michael D sold 15,000 shares worth $412,500. West Steven M sold 15,000 shares worth $412,500. The insider Burns M Michele sold 15,000 shares worth $420,000.

Cisco System, Inc. designs and sells lines of products, provides services and delivers integrated solutions to develop and connect networks around the world, building the Internet. The company has a market cap of $122.79 billion. The Firm is engaged in designing, manufacturing and selling Internet Protocol (IP) networking and other products related to the communications and information technology (IT) industry, and provides services associated with these products and their use. It has 13.04 P/E ratio. The Firm operates its business through three divisions: The Americas; Europe, Middle East, and Africa (EMEA), and Asia Pacific, Japan, and China (APJC).