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. 

The market for network performance appliances has become so competitive that Riverbed Technology (NASDAQ: RVBD ) now trades at a below-market earnings multiple of 12. With the purchase of OPNET last year, the network performance company for globally connected enterprises is facing a weak market for network equipment while it still works to achieve the synergies promised as part of the merger. The network equipment sector is facing a couple of more » Disclosure: Long RVBD. Please review the disclaimer page for more details. 

Back at the end of October, in the midst of Hurricane Sandy, Riverbed Technology (NASDAQ: RVBD) made an accretive deal to purchase OPNET Technologies that caused the stock to plummet 18%. While investors clearly didn’t like the stock back then, the mood hasn’t improved significantly now with the stock trading between the original post announcement days range. The deal provided the leader in the WAN optimization market inroads more at Motley Fool » Disclosure: Long RVBD. Please review the disclaimer page for more details. 

The mantra continues to be that "cash is king." This mantra highlighted companies with cash on the balance sheet and generating strong cash flows, but it placed no emphasis on the use of that cash. Now after years of absurdly low interest rates, those companies hoarding cash might soon find out that using that cash for an accretive deal might rule the previous king. Prior to the market open on Monday that never happened due to Hurricane Sandy, Riverbed Technology, Inc. (RVBD) announced the deal to purchase OPNET Technologies, Inc. (OPNT) for cash and stock. The deal provides Riverbed with more access to the application performance management (APM) sector and ties in perfectly to extend the network performance management (NPM) of Riverbed's Cascade product. Read the full article at Seeking Alpha. Disclosure: Long RVBD. Please review the disclaimer page for more details. 

After the close on Thursday, networking equipment stocks Juniper Networks (JNPR) and Riverbed Technology (RVBD) reported earnings that sent both stocks lower on Friday. One company missed estimates and focused on issues with carrier spending and the European debt crisis. The other exceeded estimates and talked about a product transition in Q1 leading to a major new product cycle. So which stock was down 18% and which one was down 3% at the close on Friday? That might surprise most investors who read the earnings reports and listened to the conference calls. Read the full article at Seeking Alpha. Disclosure: Long RVBD. Please review the disclaimer page for more details. 

After the close Tuesday night, Riverbed Tech ( RVBD ) reported inline earnings and revenues that were slightly lower than estimates. The stock was crushed in after hours as traders overreacted to the revenue disappointment and ignored the record margins. The encouraging news was RVBD reporting record gross and operating margins. This means that RVBD wasn't cutting prices to just make the estimates. If anything, it backs up the claim that weakness in EMEA was as much about closing deals as competition. Other good news was that it used a part of its $611M cash hoard to invest in two new companies, Aptimize and Zeus Tech, that will be accretive in 2012. Also, US product sales grew by 50% and sales would've met the midpoint of analysts estimates if it had been able to ship the surge of orders in the last few days. Read the full article at SeekingAlpha.com.  Disclosure: Long RVBD in client and personal accounts. Please review the disclaimer page for more details. 

According to a Gleacher analyst, Cisco Systems ( CSCO ) is expected to cut about 5,000 jobs  in August. That would be a massive 7% workforce reduction for a company with roughly 73,000 employees worldwide. According to the analyst, that reduction would be similar to large cuts the company took back in 2001 and 2002. Clearly those cuts were successful, or at the very least didn't preclude CSCO from being a dominant tech company in the 2000s. Read the full article at Seeking Alpha.  Update: According to Bloomberg and other sources the job cuts might actually approach 10,000 or double the original estimate. That number is even scarier as the problems are larger than originally thought. Productivity will be disrupted in a major way with that many people cut. Disclosure: Long CSCO and RVbD in client and personal accounts. Please consult an investment advisor about your individual position. This information is for informative purposes only and should not be construed as p...

After a few months of weakness since the  disappointing guidance  of F5 Networks ( FFIV ) back in mid January, most of the networking cloud stocks have been under pressure. It tends to be a normal pattern for new disruptive services to go through extreme highs followed by lows that shake out longs. The pattern will repeat several times over the next couple of years as cloud computing becomes mainstream. FFIV is now down 35% from its highs back in January. Have the future prospects really changed that much? Read the rest of the article on Seeking Alpha .  Disclosure: Long RVBD and RDWR. Please read the disclaimer page. 

After Wednesday's close, F5 Networks ( FFIV ) reported Q1 2011 numbers that easily beat their previous estimate of $0.81 by a large $0.07. The $0.88 number also surpassed the estimates of analyst who on average forecast $0.83. The revenue number wasn't as robust, barely making the top end of the range and missing analyst estimates. With the stock plunging after hours, investors appear to either be placing too much emphasis on the revenue numbers or focusing on the Q2 guidance. Below are the numbers reported for Q1 and the guidance for Q1 provided in the Q4 report.  See the full article at Seeking Alpha .