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Bear of the Day: Cisco Systems (CSCO)

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One thing all tech bellwether’s fear is the fall from grace. Over the years, the appeal of the long-term growth of tech companies has been intoxicating. Huge growth, amazing margins, and ultimate scalability makes these some of the most attractive investments on Earth. The problem is, often times the moat around these companies is not as deep nor as wide as they would have you believe. What happens eventually is, somebody builds a better mousetrap and you are reduced to a shell of your old self.

I am not saying that is what happened to today’s Bear of the Day, but the present day reality is a significant departure from early hopes. I am talking about the very famous, well-known networking company, Cisco Systems ((CSCO - Free Report) ). Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China.

The stock is currently a Zacks Rank #5 (Strong Sell) with a Zacks Value Style Score of D, Growth of B and Momentum of C to help it round out with a VGM Composite Score of B. The reason for the unfavorable ranks is that over the last 60 days, no fewer than eleven analysts have cut their earnings estimates for the current year and next year. The bearish moves have cut the Zacks Consensus Estimates for the current year from $4.05 to $3.89 while next year’s is off from $4.22 to $4.06.

Zacks Investment Research
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The Computer – Networking industry ranks in the Bottom 15% of our Zacks Industry Rank. There is one stock within this industry which is in the good graces of our Zacks Rank. NETGEAR ((NTGR - Free Report) ) is a Zacks Rank #1 (Strong Buy). There are several stocks which are Zacks Rank #3 (Hold) stocks. These include Infinera ((INFN - Free Report) ) and Lantronix ((LTRX - Free Report) ).

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