Cisco Systems Inc. (NASDAQ: CSCO): Stock That Needs Special Handling


    SSgA Funds Management, Inc. recently announced the acquisition of new stake in Cisco Systems Inc. (NASDAQ:CSCO). The institutional investor has increased its shareholding in the Technology company by 0.75% to 187.23 million shares with purchase of 1.39 million shares. This fresh investment now brings its stake to 4.43% valued currently at $8.82 billion. In addition, Wellington Management Co. LLP raised its holdings by 7.59 million to 102.19 million shares. And Geode Capital Management LLC has lifted its position by 4.97% or 3.1 million shares – to 65.43 million shares.

    With over 21.26 million Cisco Systems Inc. (CSCO) shares trading Monday and a closing price of $42.22 on the day, the dollar volume was approximately $897.55 million. The shares have shown a positive weekly performance of 0.09% and its price on 08/31/20 gained nearly 0.05%. Currently, there are 4.23B common shares owned by the public and among those 4.22B shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 26 analysts who have offered their price forecasts for CSCO have a consensus price objective of $49.63. The analysts have set the share’s price value over the next 12 months at a high of $55.00 and a low of $44.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Cisco Systems Inc. stock is 2.30 for the next 12 months. The average price target is 14.45% above its last price level and an upside to the estimated low will see the stock gain 4.05% over that period. But an upside of 23.24% will see the stock hit the forecast high price target while mean target price for the stock is $50.00.

    Insiders at the company have transacted a total of 124 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 32 of these insider trades were purchases, accounting for 1,374,866 shares. Insider sales of the common stock occurred on 92 occasions, with total insider shares sold totaling 1,522,179 shares.

    The top 3 mutual fund holders in Cisco Systems Inc. are Vanguard Total Stock Market Index, Vanguard 500 Index Fund, and Invesco QQQ Trust. Vanguard Total Stock Market Index owns 108.01 million shares of the company’s stock, all valued at over $5.09 billion. The company sold -0.3 million shares recently to bring their total holdings to about 2.56% of the shares outstanding. Vanguard 500 Index Fund sold -0.54 million shares to see its total holdings shrink to 87.45 million shares valued at over $4.12 billion and representing 2.07% of the shares outstanding. Invesco QQQ Trust bought 71078.0 shares to bring its total holdings to over 47.64 million shares at a value of $2.24 billion. Invesco QQQ Trust now owns shares totaling to 1.13% of the shares outstanding.

    Shares of Cisco Systems Inc. (NASDAQ: CSCO) opened at $42.10, down -$0.1 from a prior closing price of $42.20. However, the script later closed the day at $42.22, up 0.05%. The company’s stock has a 5-day price change of 0.09% and -9.96% over the past three months. CSCO shares are trading -11.97% year to date (YTD), with the 12-month market performance down to -9.81% lower. It has a 12-month low price of $32.40 and touched a high of $50.30 over the same period. Currently, 21.26 million shares have been traded, compared to an average intraday trading volume of 22.54 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -4.80%, -7.19%, and -5.15% respectively.

    Institutional ownership of Cisco Systems Inc. (NASDAQ: CSCO) shares accounts for 74.40% of the company’s 4.23B shares outstanding. Mutual fund holders own 36.74%, while other institutional holders and individual stakeholders account for 37.43% and 1.70% respectively.

    It has a market capitalization of $178.65B and a beta (3y monthly) value of 0.83. The stock’s trailing 12-month PE ratio is 16.02, while the earnings-per-share (ttm) stands at $2.64. The company has a PEG of 2.59 and a Quick Ratio of 1.50 with the debt-to-equity ratio at 0.45. Price movements for the stock have been influenced by the stock’s volatility, which stands at 1.20% over the week and 1.58% over the month.

    Analysts forecast that Cisco Systems Inc. (CSCO) will achieve an EPS of $0.7 for the current quarter, $0.73 for the next quarter and $3.33 for 2022. The lowest estimate earnings-per-share for the quarter is $0.69 while analysts give the company a high EPS estimate of $0.72. Comparatively, EPS for the current quarter was $0.84 a year ago. Earnings per share for the fiscal year are expected to increase by 30.30%, and 7.56% over the next financial year. EPS should shrink at an annualized rate of 6.18% over the next five years, compared to 13.50% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 26 brokerage firm advisors rate Cisco Systems Inc. (CSCO) as a “Moderate Buy” at a consensus score of 2.30. Specifically, 13 Wall Street analysts polled rate the stock as a buy, while 12 of the 26 advise that investors “hold,” and 0 rated it as a “Sell.”

    Looking at the support for the CSCO, a number of firms have released research notes about the stock. Wolfe Research stated their Outperform rating for the stock in a research note on July 24, 2020, with the firm’s price target at. JP Morgan coverage for the Cisco Systems Inc. (CSCO) stock in a research note released on July 16, 2020 offered a Neutral rating with a price target of $50. Morgan Stanley was of a view on July 09, 2020 that the stock is Overweight, while BofA/Merrill gave the stock Buy rating on June 16, 2020, issuing a price target of $48- $55. Robert W. Baird on their part issued Neutral rating on June 10, 2020.


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