When Jim Cramer interviewed the outgoing CEO of Cisco on Wednesday, he saw a feisty guy who knew he had put his company in an untouchable lead against the competition—exactly what was needed.
John Chambers made the decision recently to hand over the reins of Cisco after 20 years of leading the company. He chose Cisco's senior vice president of worldwide field operations, Chuck Robbins, to take over in July.
When the "Mad Money" host first heard the news that Chambers was moving on, he was completely stunned. Heck, it was only 18 to 24 months ago that he thought Cisco was in real trouble, as it seemed to struggle versus competition that was gaining market share.
"Was I concerned about Cisco at the time? For a couple of quarters, yes, absolutely. I worried until it became clear that Chambers was concerned about it, too," Cramer said.
That was when Chambers unveiled various networking products that caught the competition totally off guard. The products were chalk full of things that no one assumed they had, and even had security built right in to the product in anticipation of the cybersecurity wave that has taken over the tech space.
And just when Cramer thought Europe was hurting the most? That is when Cisco swooped in and blew away the numbers with the amount of European orders it had.
"In short, over the course of two years, Chambers restored Cisco to its rightful place as the unchallenged king of the networking equipment industry," Cramer added.
Cramer can't think of a better time for Chambers to leave; he has put the company in a ripe position for growth going forward. He suspects it will fly through the roof in the next year when competition has fallen behind on the product cycle.
And the competition seems to be totally lost, at the moment. There was a time when Cramer was worried that Hewlett-Packard would catch up, but now that it's splitting in two, Cramer doesn't know what will happen with its networking business. Alcatel-Lucent and Nokia just merged, which will distract anyone involved for a while.
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"I can't imagine Robbins being any less tough on competitors than Chambers has been. There doesn't seem to be anything in his DNA that would indicate a kinder, gentler Cisco, at least when it comes to the competition. He impresses me as a take-no-prisoners kind of guy, which is exactly what is needed."
What does all of this mean? Strength.
Right now Cisco is in a position of strength and has never been more prepared. The fact that the stock was down after a great quarter on Thursday should be a gift to investors. This means it is the perfect time to scoop up Cisco for your portfolio before it goes even higher.
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