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No Guts, No Glory: Value Investing

Monday, 14 Jul 2008 | 6:30 PM ET

The way Karen Finerman invests takes guts. She holds her breath and dives into the muck to buy beaten down, troubled, and sometimes terrible companies.

Why? Although momentum men might get all the press, history shows that over time Finerman’s way -- the value way – wins the race.

If you watch the show regularly you already know that Finerman boldly bought Citigroup in the middle of the subprime crisis. Now she’s getting her hands dirty with another stock that’s been left in the trash heap.

Finerman's stock of choice is an Internet router maker that personified the go-go growth of the late 1990s. But lately shares haven’t connected with investors. In fact, its earnings valuation has sunk to its the lowest level in a decade.

We’re talking Cisco . “This is exactly the kind of name to own in market like this,” says Finerman. “These guys are dominant in their market, they have $19 billion of net cash on their balance sheet and their P/E is extremely attractive at 12 times earnings.”

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CSCO
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And if you want some protection, you can always buy the puts.





CSCO: No Guts, No Glory
An outlook on value investing, with the Fast Money crew.

And if you want some protection, you can always buy the puts.
















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Trader disclosure: On July 14, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (US), (WMT), (MSFT), (INTC), (USO); Finerman Owns (CSCO), (GS); Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO), (PDE); Finerman's Firm Is Long SPX Index Puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY); Seymour Owns (TSL), (AAPL), (CSCO), (INTC), (MER), (MSFT)

Terranova Owns (VLO), (SA), (YHOO), (FCX), (IYT), (GOOG), (CME), (INTC), (BNI), (LUV), (XLF), (SU); Terranova Is Short 30 Year US Bond Futures (September); Terranova Owns Dollar Index Futures (September)

Terranova is chief alternatives strategist at Phoenix Investment Partners;Phoenix Investment Partners Owns (IGE),(DBC), (DBV), (RWX), (AAPL), (AMD), (ATI), (AW), (BA), (BAC), (BNI), (BSC), (BUD), (C), (CHK), (COH), (COP), (CSCO), (CME), (CVX), (DAL), (DNA), (DVN), (FCX), (FNM), (FRE), (GOOG), (GS), (HAL), (HOT), (IBM), (INTC),(ICE), (JNJ), (JNPR), (JPM), (LEH), (LUV), (M), (MEE), (MON), (MOS), (MS), (MSFT), (NCC), (NUE), (NYX), (NDAQ), (OC), (POT), (RBN), (RSG), (SU), (SUN), (SWKS), (TIE), (TSO), (USB), (VLO), (WB), (X), (XOM), (YHOO)

Phoenix Investment Partners Owns (AA) And Is Short (AA); Phoenix Investment Partners Owns (BHI) And Is Short (BHI); Phoenix Investment Partners Owns (DE) And Is Short (DE); Phoenix Investment Partners Owns Shares Of InBev NV; Phoenix Investment Partners Owns (MER) And Is Short (MER); Phoenix Investment Partners Owns (SLB) And Is Short (SLB); Phoenix Investment Partners Is Short (SONC); Phoenix Investment Partners Owns (WFC) And Is Short (WFC); Phoenix Investment Partners Owns Nike-Cl B Shares; Phoenix Investment Partners Owns (KMB)

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C
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CSCO
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Contact Fast Money

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  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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