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Burned By Cisco

A long position in Cisco looked like a hot trade but all it did was burn Anthony Scaramucci. So what does he have to say about this stock now?

The Hedge made the fateful call on November 11th after the company issued a disappointing outlook and warned of uncertain demand out of Europe.

Scaramucci thought the resulting sell-off was overdone.

”At 15.4 times current forward earnings, it's a very cheap stock,” he said. “It's a blue chip, world class franchise – a leading global growth company. I think this is a great play.

Unfortunately, the Street wasn’t quite so forgiving. Since Scaramucci said to get long shares have flatlined at best.

So how does he suggest trading Cisco now? "The momentum is clearly out of this stock," he admits. But for a value buyers he still sees opportunity.

"It's still a strong franchise, has strong cash flow and great balance sheet. I continue to like it long-term but I'm looking at a 3-5 year time horizon."


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Trader disclosure: On Dec. 22, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman owns (AAPL), (GOOG), (JPM) and (MSFT). Stephen Weiss owns (DVN), (FAS), (QCOM), (TBT), (VZ), (AKS), (SWC), (COP), (HK) and (NFLX) puts. Tim Seymour owns (AAPL), (BAC) and (F).

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BRIAN KELLY
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ED GROSHANS
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