Stocks to Avoid #1: Cisco (CSCO)
You have to give credit where it’s due. Once Cisco (CSCO) fell out of favor about 10 years ago (following the dot-com implosion on the heels of the fact that swarms of networking/router competition popped up to make life tough for Cisco), many presumed it was only a matter of time before the company simply vanished.
Well, not only CSCO still alive and kicking, but it has posted revenue growth in nine of the past 10 years. The coming year, however, might finally be the one in which Cisco’s size and lack of a distinguishing flagship product catches up with it.
Oh, the company still makes routers, servers, communication systems, cloud solutions and more … all marketable stuff. CSCO stock offers plenty of value too, with a trailing P/E of 11.5 and a forward-looking one of 10.
But there’s a reason CSCO stock is down 20% over the past four months (allowing shares to become this cheap), and that reason is simply that the market doesn’t have much faith that Cisco will be able to remain as competitive in 2014, as it has little on its product menu to get and keep the market’s attention.