Cisco Systems Inc (CSCO): Get a 17% Return From CSCO Stock

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Cisco Systems, Inc. (NASDAQ:CSCO) — This communications equipment company provides a complete line of routers and switching products that connect and manage communications among local and wide area networks. An improving economy is increasing network spending, and Standard & Poor’s expects CSCO stock to benefit from a rapid rise in bandwidth use. The demand is also accelerating for data center solutions and the migration to cloud networking.

FY17 is expected to show excellent revenues growth from traction on new products in data centers, security and cloud networking. Analysts expect earnings of $2.33 per share for FY 2016, followed by an increase to $2.43 per share in FY 2017. (EPS in FY 2015 came to $1.75.) S&P, which has a four-star buy rating on CSCO shares, expects the stock price to benefit from share repurchases. The ratings company also highlighted Cisco’s recent acquisition of CloudLock Inc., which specializes in cloud access security broker technology — a benefit as CSCO expands its cloud security offerings. Income investors will like the 3.5% yield on Cisco stock as well.

Technically, Cisco broke from a quadruple top at $29.25 last week. That line now becomes support with the next support at the 50-day moving average at $28.51, then the 200-day moving average at $27.29. The stock triggered a golden cross, long-term buy signal, in April. MACD is positive and accumulation, though below daily averages, has been steady.

The overall pattern is that of a reversal formation with a trading target of $34. But try to buy CSCO at $29, since it is currently slightly overbought, for a projected return of over 17%.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/07/cisco-systems-inc-csco-stock-trade/.

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