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Pros: Cisco Isn't Getting The Attention It Deserves

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Pros: Cisco Isn't Getting The Attention It Deserves

Trillion-dollar tech giants Apple Inc. (NASDAQ: AAPL) and Amazon.com, Inc. (NASDAQ: AMZN) continue to dominate headlines and help push the Nasdaq index to all-time highs. But Cisco Systems, Inc. (NASDAQ: CSCO) is flying under the radar, with a stock that's poised to rally, according to a notable market technician and a money manager.

The Analyst

Craig Johnson, chief market technician at Piper Jaffray, and Gradient Investments President Michael Binger talked tech stocks during a recent CNBC "Trading Nation" segment.

The Thesis

Shares of Cisco have been trading in a tight range between the $40 and $45 level, but the stock finally broke out and closed Tuesday at $47.73. The stock has a path toward the $51 to $52 level, said Piper Jaffray's Johnson, adding that investors may want to consider "buying here today."

Cisco's stock is "cheap" at a PE ratio of close to 16 times forward earnings, said Gradient Investment's Binger. Cisco's stock is trading at a discount valuation to Apple at 17 times forward earnings, and the Nasdaq Composite index, which trades at 22 times forward earnings.

Names like Amazon have already doubled in value over the past year and aren't as attractive as Cisco, Binger said. Buying a mega-cap tech stock today requires that an investor be comfortable with "sky-high valuations," under the assumption someone else will be buying the stock in the future at even higher valuations, he said. 

Price Action

Cisco shares were down 1.5 percent at $47.03 at the time of publication Wednesday.

Related Links:

What Wall Street Thinks Of Cisco's Q4 Earnings

Investigating Cisco's Quest To Bring India Online

Posted-In: CNBC Craig Johnson Piper Jaffray tech stocks Trading Nation Trillion Dollar ValuationAnalyst Color Media Best of Benzinga

 

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