Out Fox The $treet

Cisco Systems is now more appealing than originally thought at lower levels. The catalyst from the shift to software is still taking a long time backing the original bearish thesis. The ability to boost the net payout yield via massive stock buybacks has changed the equation. The stock offers a near 11% yield. My   view   on   Cisco Systems   ( CSCO ) was rather harsh as the networking giant saw the stock surge in the last year, but the actual quarterly results didn't improve significantly. The aggressive use of cash repatriated from foreign locations combined with solid execution on   recent earnings reports   has my view turning more bullish now. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Cisco Systems faces a large tax bill from the mandatory repatriation of foreign earnings. The tech giant has one of the largest cash balances impacted by the tax law. The current capital return plan is solid, but the net payout yield fails to impress. One company flying under the radar of the mandatory tax repatriation of foreign earnings is  Cisco Systems  ( CSCO ). The market constantly focuses on the other tech giants like  Apple  ( AAPL ) and  Microsoft  ( MSFT ) or new tech companies, but Cisco Systems actually has one of the largest balances of cash stashed in international locations. Read the full article on Seeking Alpha.  Disclosure: Long AAPL. Please review disclaimer page for more details. 

Today Cisco Systems ( CSCO ) announced its first dividend payment on April 20th to shareholders of record as of the close of March 31st. While the $0.06 quarterly or $0.24 annual dividend yields only 1.4% it does add to an already sizeable buyback program that yields over 5%. In total shareholders will get a over  6% returned to them via the combination of buybacks and dividends. With over $25B in cash and massive annual cash flows, CSCO should be able to easily handle these payouts and as long as the stock remains below $20 the yields will be huge. CSCO clearly has a lot of issues with their products and margins, but every stock has a value point and this might just be the spot. At least as long as the yield remains this attractive. Via  CSCO PR: A quarterly dividend of $0.06 per common share will be paid on April 20, 2011, to all shareholders of record as of the close of business on March 31, 2011. Future dividends will be subject to Board approval. "As the...

Accenture (ACN) jumped roughly 8% today on the back of solid earnings released last night. Anybody following the Net Payout Yields would've been alerted to jump into this stock long before this report. Even after a big run the last few months, ACN has a solid dividend of 2% and repurchased $620M worth of shares during the last quarter providing a roughly 8% buyback yield. The total Net Payout Yield jumps to nearly 10% even with the jump in stock price. ACN raised full year guidance to a mid point of $3.12 a share easily exceeding the $3.04 estimate. Part of this is due to the $.04 gain in this quarter alone from the buybacks. Then again analysts know they plan to buyback shares so that should be factored into estimates. Lots of investors continue to slam buybacks but ACN provides an ample example of how they can work so masterfully. With the stock depressed over the last year, ACN used their good balance sheet and strong cash flow to buy back shares on the cheap. So cheap that ...

Bought Cisco Systems (CSCO) for the Net Payout Yield portfolio after its follow thru selloff this morning. CSCO was down roughly 10% yesterday following what were decent earnings especially compared to their value. Does valuation matter anymore? After hours on Wednesday we wrote a little note [Cisco Whacked 7% on 18%+ Guidance] . At that point, we mentioned potentially buying the stock considering how cheap it has become so after letting the market over react we made a purchase today when it was down nearly 1% again and it closed nicely at breakeven. Way too much pain for a generally strong quarter. Remember, in the long run its not whether or not they beat revenue estimates that drives the stock, but whether or not revenue and more specifically earnings expand. CSCO has great potential on that front. The reason CSCO was purchased for the Net Payout Yield portfolio was two fold. First, we needed better technology exposure in the fund as Microsoft (MSFT) just isn't cutting it and we...

This view my Richard Berner of Morgan Stanley goes a long way to back up the statements of CSCO CEO John Chambers on their earnings call last night. Though everybody chose to hark on the comments about slowdowns in June and concerned customers, he actually stated that July picked up big time. In fact, CSCO plans to hire another 3K people this year bringing the yearly increase to nearly 10%. Now is that suggestive of a company concerned about a meaningful slowdown or somebody just providing a conservative outlook? You be the judge, but the latter is much more likely. And really were you surprised that CSCO talked about a temporary slowdown in June? Seriously people!

This market has become unreasonably brutal. Cisco Systems (CSCO) forecasted revenue growth of 18-20% for the next quarter yet the stock is getting absolutely whacked after hours. This is for a company trading at only 12x 2011 estimates around $1.8. The market has lost all touch with valuation measurements. With $40B in cash, CSCO only has a market cap of $95B and earnings to exceed $10B. Trading at 9x EV is obscene for a company basically growing at around 20%. Even the CEO John Chambers commented about how the market doesn't believe they can continue to grow at the high end of their long term growth rate of 12-17%. This stock could easily trade at double the current value based on the growth they are seeing in a weak economy. The market continues to value stocks as if they expect earnings to be cut in half. CSCO isn't owned in any of our portfolios, but its starting to appear a lot more interesting considering the compelling valuation. Just ignore all the noise regarding them ...