Should you put money to work in Cisco after the company’s latest acquisition? According to Pete Najarian, that would be a mistake.
Of course it makes sense that Cisco would land on the radar; on Thursday the tech titan said it would buy NDS Group, a developer of software for multichannel television networks, for $5 billion.
Although the acquisition might seem like a sign that CEO John Chambers is getting more aggressive in his attempts to drive growth – the OptionMonster just can’t get excited.
“I think he’s building something,” says Najarian, “but it’s the same kind of building process that we’ve been watching for years and we continue to wait – when are we going to see the results?”
Trader Stephanie Link, who is co-portfolio manager of Jim Cramer's charitable trust portfolio, says much the same. “I’m not a buyer either. There are other places in tech that have faster growth.”
“I see more upside in Intel and Microsoft ,” adds Najarian. “They’re exploding through 52-week highs and they’re paying a nice dividend.”
Deutsche tech analyst Brian Modoff sees the move a little differently. "it's a complimentary deal," he says. "The kind we like to see - indeed they’re moving in the right direction.” He has a buy rating on the stock with a $24 price target.
NDS specializes in the development of interactive systems for secure delivery of entertainment and information to digital TVs, digital set-top boxes, PCs and mobile devices. It also provides electronic security systems for Web applications.
Its technology is expected to complement Cisco's Videoscape video delivery technology.
The company's flagship product is its encryption and conditional access system VideoGuard, which is installed on home TVs via smartcards integrated into set-top boxes.
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Trader disclosure: On Mar 15, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Kelly is long SMH; Kelly is long MXN; Kelly is short JPY; Kelly is short Aussie dollar; New Zealand dollar; Grasso is long ASTM; Grasso is long AVAV; Grasso is long BA; Grasso is long D; Grasso is long MHY; Grasso is long NUAN; Grasso is long MO; Grasso is long PFE; Grasso is long PRST; Grasso is long S; Grasso is long XLU; Link is long STI; Link is long JPM; Link is long USB; Link is long TJX; Cortes is long Treasuries; Cortes is long PPH; Cortes is long DEO; Cortes is long SO; Cortes is long SBUX; Cortes is short USD vs. JPY; Cortes is short AAPL
For Brian Modoff
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