Sunday, July 31, 2016

Recent Buy - Cisco (CSCO)

Good Evening,

After my wife graciously allowed me to invest $16,000 into stocks back around May, we have been slowly building back up cash reserves and slowly buying stocks.  After we updated our 401K investments to lower our taxable income, there has been less money around to invest into the taxable accounts.  Over the past 2 months, we have only made two purchases:

  • 82 shares of CSCO at $29.15 on 6/23/16
  • 81 shares of CSCO at $30.80 on 7/22/16
Total investment of roughly $5,000 into CSCO in the past 2 months.  I am of the opinion that Cisco is one of the most undervalued companies in the technology sector right now.  Not to mention, they are running a 3.5% dividend yield!  Cash of over $60 Billion and Debt of under $30 Billion so there is room to grow the dividend, continue buying shares, and make attractive acquisitions to boost growth.

Moving into a technical perspective of the stock chart, it has been trading below the $30 range for over 10 years.  This basing pattern was experienced by MSFT, KO, T and various others.  To me, it seems that some of these "old" tech companies are starting to turn the tides and have grown into their extreme valuations from the tech bubble.  I had a hunch years ago that MSFT was beginning to right the ship and I only acted on it with a few thousand dollars.  I missed the double from the bottom.  My belief is that CSCO is on its way to break out and potentially double over the next 3-5 years.  I do not want to miss out.  If you look at CSCO's earnings, buybacks, and transition in business processes, they are like all of the other "old" companies.  They have taken a little while to turn around, but its working and I'm thinking the gravy train will continue.  In the meantime, they sport a 13 forward PE and a 3.5% dividend yield, so I can wait to see it through.

This brings my CSCO position to an even 300 shares worth roughly $9,000 at todays prices.  This position provides $312 of income per year with current dividend at $1.04

Thanks for reading!



  1. Great buys, I wish I owned more than I do. Thanks for sharing!

    1. I plan on purchasing more if it stays around the $30 level. Earnings are coming up so we shall see where things go!

  2. Thanks for sharing your recent purchase. CSCO is a solid name in the network plumbing game and while it looks like a good prospect I still do not own it in my portfolio nor any other tech name for that matter.

    1. Yea, I understand. Tech is a tricky thing to own for dividend investors. The tech game can change so rapidly that you never know when a company's business is going to tank. Fortunately I think CSCO has a good moat and should continue to perform well over the next few years

  3. Nice buy this is on my watch list, but according to my investment plan I'm already heavy on my technology sector.