GO
Loading...

Why Cisco Is a Buy: Analyst

Tuesday, 9 Aug 2011 | 6:45 PM ET

Although Cisco recently announced plans to lay off 6,500 workersand hit a 52-week low on Wednesday, one analyst said now is the time to buy the technology stock.

"We're a buyer here," Shaw Wu, an analyst with Sterne Agee, told CNBC. "We're looking for a longer-term investment. We think it's a great value here."

Technology: Time to Buy?
Perspective on yesterday's selloff and where to find investment opportunities in the tech sector, with Brian Marshall, Gleacher & Company, and Shaw Wu, Sterne Agee.

Wu added that Cisco could drop another point or two, but said he thinks the stock could increase 10 points from its current price. He cited the company's strong technology and management's willingness to change its thinking as reasons for a buy rating.

Brain Marshall, a senior equity analyst with Gleacher & Co., called the company's current restructuring the right first step.

In order to turn its stock around, Cisco needs to lower its long-term financial model and release a plan outlining how it will start to reinvigorate its product portfolio, Marshall told CNBC.

Cisco will release its fourth-quarter earnings on Wednesday.

"I think the Street obviously is not expecting much," said Marshall, who has a neutral rating on the stock. "This company is trading at a very anemic discount—roughly four times free cash flow, so people don't expect much."

______________________________
CNBC Data Pages:

______________________________
CNBC's Companies in the News:

AOL

  • AOL Shares Plunge on Surprise Quarterly Loss

Berkshire Hathaway

Transatlantic Holdings

______________________________
Disclosures:

Shaw Wu's firm, Sterne Agee & Leach, makes a market in the shares of Cisco. Marshall's firm, Gleacher & Company Securities, also makes a market in the securities of Cisco.

Disclaimer

  Price   Change %Change
AOL
---
BRK.A
---
CSCO
---

Featured