Cisco Stock Is in Good Hands With CEO Chuck Robbins

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CSCO stock - Cisco Stock Is in Good Hands With CEO Chuck Robbins

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If we didn’t consider its brilliant performances over the past few years, Cisco Systems (NASDAQ:CSCO) doesn’t strike me as exciting. Traditionally known as a networking and telecommunications-equipment provider, CSCO stock is similar to International Business Machines (NYSE:IBM). Both have powerful legacy businesses but are transitioning towards today’s relevant technologies.

Still, let’s be honest: Companies that resonate with today’s investors are those that were essentially born relevant. Judging from the drama of organizations like General Electric (NYSE:GE), Americans just don’t have the appetite for massive, unwieldy entities. And while I’m generally positive about IBM and its longer-term strategies, the broader transition story is mostly uninteresting.

CSCO stock offers a compelling argument as the exception. On a year-to-date basis, shares have gone up over 21%. This robust move follows a very impressive 31% return in 2017. Over the trailing five-year period, CSCO has provided shareholders with nearly 92% in gains.

Most of those returns came during current CEO Chuck Robbins’ administration. Since he assumed the head leadership role on July 26, 2015, CSCO stock has soared 80%. To put this into perspective, shares barely budged between January 2004 and the date Robbins took over the company.

The leadership change coincided with Cisco divesting much of its legacy divisions. However, its refocusing towards relevant sectors like cloud computing and mobile security came alive under Robbins. The company engaged multiple projects and partnerships to further their influence in these competitive fields.

Moreover, management progressed in its transition efforts while still running a tight ship financially. Conservative investors appreciated that Cisco kept its costs and expenses in check while it ran through some lean years. Additionally, the tech firm has never failed to meet earnings expectations during Robbins’ term.

But with so much upside written, is it worth buying CSCO stock now?

Robbins Is a Gamechanger for CSCO Stock

No one individual can take credit for an organization’s turnaround. Especially in a company like Cisco — which has multiple components — great leadership alone can’t right a sinking ship. The cogs in the gear must do their part as well.

At the same time, we’ve seen the benefits of exceptional leadership. A prime example is Microsoft (NASDAQ:MSFT). Prior to current CEO Satya Nadella’s reign, Microsoft was rudderless. Consumers deemed its products irrelevant, and competitors, notably Apple (NASDAQ:AAPL), swept it aside.

Today, Microsoft is a refocused enterprise, plying its trade in emerging sectors as well as revamping its core software business. It has even sparked interest and momentum in its legacy PC business. Therefore, it’s no surprise that MSFT nearly tripled since Microsoft announced Nadella’s leadership takeover.

On the flipside, we’re all familiar with how bad management can derail an otherwise promising organization.

Robbins is a gamechanger for CSCO stock, and I mean that in the positive sense. One of the overriding attributes that he levers is that he’s an expert in his field. This is not one of those CEOs who is recruited only for their business acumen.

Not only that, Robbins has spent considerable time with the company. As senior vice president, he laid the foundations for Cisco’s transition, including acquiring network-security firms Sourcefire and Meraki. He knows what makes Cisco tick, having worked his way to the top beginning from his first role as an account manager.

To no surprise, you won’t find criticisms about Robbins’ technical expertise. You also won’t find much criticism about his business smarts. Robbins currently serves as the chairman of the U.S.-Japan Business Council, an impressive feat considering his Cisco duties. Moreover, he volunteers his time for the M.S. Society.

Cisco Can Take the Lead in Lucrative Markets

Should you then buy CSCO stock based purely on Robbins’ abilities and attributes? No, that ship has sailed a long time ago.

What you should do is buy CSCO stock because it can make the most out of emerging opportunities, thanks to Robbins at the helm. If your ethos is “people, people, people,” you’re going to find few prospects superior to Cisco.

His expertise and leadership will particularly come in handy when the organization dives into the 5G network. As Robbins puts it, the 5G is very much in the early stages. This means competent, capable players will have a leg up on the competition. We know factually that Cisco is capable, and most certainly, Robbins is more than competent.

After all, this is an individual who has spent over 20 years with the company. By today’s standards, we’d call him a lifer. I seriously doubt that he would do anything to risk sullying his hard-earned reputation. This and multiple other factors should give you confidence towards CSCO stock.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


Article printed from InvestorPlace Media, https://investorplace.com/2018/08/cisco-csco-stock-in-good-hands-with-ceo-robbins/.

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