...Finance 560 Securities Analysis Course Project: Stock Analysis – Cisco Systems, Inc. (CSCO) Company’s Summary Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry worldwide. It offers routers that interconnects public and private IP networks for mobile, data, voice, and video applications; switching products, which provide connectivity to end users, workstations, IP phones, access points, and servers; application networking services; and home networking products, such as adapters, gateways, modems, and home network management software. The company also offers security products comprising span firewall, intrusion prevention, remote access, virtual private network, unified client, Web, and email security and network security products; storage area networking products for data center environments that deliver connectivity between servers and storage systems; collaboration products to integrate voice, video, data, and mobile applications on fixed and mobile networks; video connected home products, including digital video distribution systems and digital interactive set-top boxes; and wireless systems. In addition, it provides optical networking products, Cisco TelePresence systems, Cisco Unified Computing Systems, physical security and video surveillances, and digital media systems. Further, the company offers technical support services; and responsive...
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...Data Market Cap $152.07B Total assets $68.128B Valuation EPS (ttm) $1.04 P/E (ttm) 25.58 Profitability & Effectiveness (ttm) ROA 9.7% ROE 16.8% Profit Margin 17.0% Oper. Margin 25.3% Analyst: Jeff Griffith jmgxb6@mail.missouri.edu JOHN LOTHMAN jdlrzf@mizzou.edu Overview: Cisco Systems Inc, currently the largest company in the Communications Equipment industry, offers a variety of communications products and services. The company supplies most of the Internet Protocol (IP) networking equipment used for the Internet and is the world’s largest supplier of high-performance computer internetworking systems. The company offers products in four segments: switches, routers, advanced technologies, and other. As of the end of Cisco’s fiscal year in July 2009, switches made up 41% of sales. Cisco has become the dominant market...
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...TO: Senior Manager FROM: James Adams, Michael Hsu, Siyao Li, David Miller, Prerak Patel DATE: September 10th, 2012 SUBJECT: Cisco Case In this report, our group will examine what went wrong at Cisco in the early 2000’s. We will address what and how the main problem occurred for Cisco. Then, we will provide a solution on how to prevent this error from occurring in the future. The Nature of the Problem Cisco was one of the fastest growing companies in the world, on pace to size up the United States economy. They were a primary provider of switches and routers. Their success was largely credited to a computer model that helped forecast their future sales and demand. Even when the industry showed signs of struggle, Cisco still managed to maintain successful quarters. They had seen over a decade of growth until the third quarter in 2001. In an unforeseen turn, Cisco in the third quarter of 2001 dropped sales by 30%, wrote-off $2.2 billion of inventory, and laid-off nearly 8,500 employees. Cisco, a powerhouse company with increasing projections, took a big hit. Stock prices dropped by $68.37 in a 3 month span. The Real Causes Cisco's demand forecasting did not correctly predict the economic trend as it did not account for economic spending, interest rates, and debt. Cisco overlooked these macroeconomic factors, not realizing that this type of high demand was not sustainable. Also, the company was recording profits at an all-time but failed to take into consideration...
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...Cisco Case Study Cisco Systems, Inc. (NASDAQ: CSCO) is an American multinational corporation headquartered in San Jose, California, United States, that designs and sells consumer electronics, networking, voice, and communications technology and services. Founded by Len Bosack and Sandy Lerner, a married couple who worked as computer operations staff members at Stanford University, along with Nicholas Pham, founded Cisco Systems in 1984. For the first time in a decade Cisco experienced its first negative quarter in 2001. The loss of earnings was due to the economic down. Their sales declined by 30%, inventory surplus was written off as a loss to the tune of $2.2 billion, 8,500 workers were laid off and stock prices plummeted by almost 60%, as of April 6, 2001 stock prices were $13.63 per share, down from $82 per share 13 short months earlier. Cisco leaders blamed the economy for its decline; the economic downturn was only partly to blame for Cisco’s problem. To analyze and interpret the article What Went Wrong at Cisco in 2001, I will first explain what actually went wrong, second I will Show a SWOT analysis to identify Cisco’s strengths, weaknesses, and threats, third we will analyze and discuss the nature and problems of the Cisco’s business-level and corporate strategy, last I will present my solutions and recommendations for Cisco in the future. What Went Wrong at Cisco In 2001? Cisco’s problems were only magnified by the economic downturn but there had been signs of...
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...Cisco System, Inc Cisco System, Inc SMIF Stock Report Information Technology – Communication Equipment Analyst: Thanh Nguyen Date 12.04.13 Ticker: ●CSCO Recommendation: ● HOLD Price: ● 21.24 (as of 12.04.13) Price Target: ● 21.74 Highlights * HOLD Recommendation: Cisco’s expected revenues for the coming quarter will be down 8 to 10% because of weak demand in emerging markets. However, the company had high earnings, and was consistently increasing revenues over recent years. It is a large-cap growth company in the technology sector and is expected to outperform the emerging markets over the next years. * Strong Financial Position: Cisco has solid fundamentals with consistent growth, high margins, and a strong balance sheet. Its gross profit margin is mostly higher than 60%, and blows away that of the S&P 500 average (around 44%). Since 2009, Cisco has kept increasing sales. It has a very strong balance sheet with more than $50 billion in cash and cash equivalents in 2013, which is higher than the total of debt ($42 billion). Besides, it has a good asset management, which has maintained to keep inventories low over years with an average of 2% of total assets. Further, Cisco commits to return a minimum of 50 percent of its free cash flow to shareholders in the forms of both dividends and share repurchases. Cisco generates a healthy amount of cash of about $10 billion to $12 billion annually in operating cash flow, it will have room to deliver...
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...González 457179 588726 371282 Index Executive Summary Brief Outlook of CISCO Corporate Governance General Economic Analysis Industry Analysis Competitive Analysis Financial Analysis Value Creation Analysis Recommendations References Appendix – Appendix 1: Balance Sheet – Appendix 2: Income Statement – Appendix 3: Cash Flow Statement – Appendix 4: Liquidity – Appendix 5: Profitability – Appendix 6: Leverage – Appendix 7: Efficiency – Appendix 8: Growth Sustaintability – Appendix 9: BETA – Appendix 10: Market Value – Appendix 11: Value Creation – Appendix 12: Statistics – Appendix 13: Competition 2 3 4 5 6 7 8 14 15 16 16 17 18 19 20 21 22 23 23 26 27 28 29 2 Executive Summary Cisco Systems, Inc. is the worldwide leader in networking for the Internet. CAGR 2005-2009 for sales has growth at 10%. CAGR 2005-2008 for income has growth at 9%. Cisco has a strong liquidity position, current ratio on 3.24 for 2009. It has been growing through successful acquisitions that creates value for the company. Its WACC has been decreasing in this last 5 years 4.39% for 2009. Its gross margin has maintained above 60% over the last 5 years. Operating margin CAGR is one of the highest for the last 5 years: Cisco 24%, HP 7.6%, Juniper 6.07%, Industry 10%. Growth rate of EPS over a 5 year period for Cisco is 8.27 vs 7.2 of the sector and -1.46 for Juniper. Cisco has a sustainable growth. Their main competitors are Juniper and HP, however companies like...
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...Finance 355; 7:00pm, Cutler Long Term Financing Paper | CISCO Inc. | Team Advantage: | CAPM Model & Discounted Cash Flows Capital Assets pricing and Discounting Cash flow are the widely used valuation methods for investment. ¾ of US companies using CAPM for Capital budgeting. General idea behind a CAPM is that investors need to be compensated for the risk that they are taking. Under the CAPM we are observing how much return Cisco’s investors are expecting. For the Calculation CAPM for CISCO we used numbers based off industry standards from S&P 500 and U.S. Treasury. CISCO Beta was calculated at 1.18 (source: http://finviz.com/quote.ashx?t=csco). For the risk free rate 0.17% was calculated based of the yearly US treasury rate from 2012 (source: http://www.treasury.gov ). 11.62% is the market risk based on the YTD return for the S&P 500 (source: http://money.cnn.com/data/markets/sandp/). 12.97% would be the expected/required return for CISCO. CAPM is calculated as follows: = 0.17% + 1.18 (11.79 -0.17) = 0.17+ 1.18 (11.79 – 0.17) = 1.35 (11.62) = 12.97% Discounted Cash Flow Model relies on future cash flow. It is described as "discounted" cash flow because cash in the future is worth less than cash today. DCF says that a company is worth all of the cash that it could make available to investors in the future. There are 3 approaches to DCF: PV, NPV, DDM. We need 3 input for DCF model: projected CF, discount rate and length of time for ongoing project...
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...1. Cisco systems 2.1 Income Statement Cisco Systems (CSCO) Income Statement | | | | | Fiscal year ends in July. USD -- millions except per share data. | 2009-07 | 2010-07 | 2011-07 | Dell 2011 | Revenue | 36117 | 40040 | 43218 | 61494 | Cost of revenue | 13023 | 14397 | 16682 | 50098 | Gross profit | 23094 | 25643 | 26536 | 11396 | Operating expenses | | | | | | Research and development | 5208 | 5273 | 5823 | 661 | | Sales, General and administrative | 9968 | 10715 | 11720 | 7302 | Total operating expenses | 15772 | 16479 | 18862 | 7963 | Operating income | 7322 | 9164 | 7674 | 3433 | | | | | | | Interest Expense | 346 | 623 | 628 | 199 | Other income (expense) | 717 | 874 | 779 | 116 | Income before taxes | 7693 | 9415 | 7825 | 3350 | Provision for income taxes | 1559 | 1648 | 1335 | 715 | Net income from continuing operations | 6134 | 7767 | 6490 | 2635 | Net income | 6134 | 7767 | 6490 | 2635 | Net income available to common shareholders | 6134 | 7767 | 6490 | 2635 | | | | | | | Earnings per share | | | | | | Basic | 1.05 | 1.36 | 1.17 | 1.36 | | Diluted | 1.05 | 1.33 | 1.17 | 1.35 | Weighted average shares outstanding | | | | | | Basic | 5828 | 5732 | 5529 | 1944 | | Diluted | 5857 | 5848 | 5563 | 1955 | | | | | | | 2.2 Balance Sheet | | | Cisco Systems (CSCO) Balance Sheet | | | | | Fiscal year ends in July. USD -- millions except per share data. | 2009-07...
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...its rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit from the capital gain on those value stocks. Basing on this ground and reinforced with stellar performance of the U.S. Active as well as Pelican Fund during 1980s to...
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...its rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit from the capital gain on those value stocks. Basing on this ground and reinforced with stellar performance of the U.S. Active as well as Pelican Fund during 1980s to...
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...COMPUTING…….………………………12-15 US ENERGY AND CLIMATE POLICY………………………………………………………………………………………15 CLOUD COMPUTING PROVIDERS………………………………………………………………………………….....16-21 Salesforce.com……………………………………………………………………………………………………………....16-17 Amazon-Web Services…………………………………………………………………………………………….....17-19 Cisco Systems…………………………………………………………………………………………………...…..19-21 CLOUD AND INDUSTRY’S FUTURE………………………………………………………………………….……... 21-22 CONCLUSION…………………………………………………………………………………………………….……...……. 22-23 EXHIBITS…………………………………………………………………………………………………………………….…...…. 24 Annual Financials for Salesforce.com…………………………………………………………………..……..24-26 Annual Financials for Amazon-Web Services……………………………………………………….….27-29 Annual Financial for Cisco Systems………………………………………………………………………30-32 Financial Ratios……………………………………………………………………………………………………………….……….33 Grow Customer Base……………………………………………………………………………………………………………….33 Grow Market Share………………………………………………………………………………………………………….……..33 Salesforce Historical Stock Chart……………………………………………………………………………..………………34 Amazon.com Historical Stock Chart…………………………………………………………………………………………34 Cisco Systems Historical Stock Chart…………………………………………………………………………………..…..34 REFERENCES…………………………………………………………………………………………………………………35-37 INTRODUCTION Cloud computing is a technology model that allows users to access and obtain delivery of information and resources over the Internet. This model...
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...Apple Financial Performance General Notes: This financial analysis for Apple Inc was carried out for the year 2007. The first section of the Financial Analysis will detail my preconceived notions of Apple (without the facts in hand). The second part of the Financial Analysis will review Apple's stock performance, various financial ratios, competitors, market segment. Interest coverage ratios, dividend yield ratios, and dividend payout will be discussed as well. The financial analysis will conclude with my opinion of Apple's future prospects, its stocks, and whether it is creating value to its shareholders. Apple General Information On January 3, 1977, Apple was officially incorporated in California. Apple's stock is traded under sticker Symbol "AAPL" in NASDAQ stock exchange, and in Frankfurt Stock Exchange, Apples' shares trade under the symbol "APCD". Apple became a public company in 1980, and in its Initial Public Offering (IPOD), Apple's shares were offered for $22.50. On a split-adjusted basis, Apple's Initial Public Offering stock price was $2.75. Apple has no preferred stock outstanding. Apple, Inc. Dividend Policy Apple doesn't pay its stockholders any dividends. In fact, the last time Apple paid dividends was in December of 1995. Apple paid dividends from 15 June 1987 to 1995. As Apple does not have an active dividend policy, Dividend Reinvestment Program (DRIP) is also not available to investors. Cash dividends that Apple did pay, ranged from .06$...
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...Cisco Systems [pic] Networking the Internet Revolution Brandi Martin brandi@ucsc.edu Table of Contents Paper Objective Section 1: The Network Equipment Industry A. Industry Profile B. Competitive Strategies within the Industry C. Porter Model Evaluation of Industry Forces D. Globalization of the Industry E. Importance of Information Technology to the Industry Section II: Company Perspective: An Analysis of Cisco Systems A. Cisco Company Profile B. Market and Financial Performance C. The Competitive Strategy D. Significance of Information Technologies E. Strengths and Weaknesses of Cisco Section III: A. Strategic Option Generator B. Roles, Roles and Relationships C. Redefine/Define D. Significance of Telecommunications E. Success Factor Profile Section IV: A Final Analysis of the Success of Cisco Systems A. Success of Business Strategy and Information Technology Use to Date B. The Effective Position of Cisco for the Future Objective of Paper The purpose of this paper is to provide an analysis of Cisco System’s primary business strategies and its utilization of information technologies to achieve a competitive advantage in the network equipment industry. The paper is divided into four sections, starting with a broad industry analysis, then narrowing to concentrate on Cisco Systems Inc., followed...
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...Case Study of Cisco Systems, Inc. Nirav Sheth INTB 3354: Introduction of Global Business Professor Alana Aleman April 8, 2015 1. Introduction Leonard Bosack and Sandy Lerner, the married couple who met at Stanford University, founded Cisco in 1984 in San Francisco, California. During Cisco’s founding years at Stanford University, Leonard Bosack, Sandy Lerner, and a few others helped connect hundreds of computers throughout Stanford University on a wired network. They understood that they could take this technology and help other university and business, which helped Cisco grow into the $150 billion networking conglomerate it is today. Cisco multiprotocol router, Cisco’s first major product, was one of a kind package of a group of routers, switches, internetworking and other telecommunication devices that helps a group of computers multitask on a closed network. From here, Cisco’s management created a market where they could sell routers, switches, servers, data centers, and other telecommunication devices and software to help connect the world through electronic devices. Like many other technology companies, there were able to help bring this technology to the rest of the world because their hardware and software did not vary too much throughout different markets. They were able to become truly global and sell their products all over the world to enable billions of people enable them to connect into the digital world. (Boudreau) 2. Problems Cisco first legal problem...
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...Routing the Path to End-To-End Communication An Analysis of Cisco Systems and how the use of Information Technology gave them a Competitive Advantage Mira Vissell ISM 158 Business Analysis Paper March 4th, 2004 Table of Contents Objective Section I: Industry Summary: An Analysis of Network Equipment Industry A. Industry Profile B. Competitive Strategies within the Industry C. Porter Model Evaluation of Industry Forces D. Globalization of the Industry E. Importance of Information Technology in the Industry Section II: Company Perspective: An Analysis of Cisco Systems A. Cisco Systems profile B. Market and Financial Performance C. Competitive Strategy Statement D. Significance of Information and Information Systems E. Strengths and Weaknesses of Cisco Section III: Structured Analysis of Information System Use A. Strategic Option Generator B. Roles, Roles and Relationships C. Redefine/define D. Significance of Telecommunications E. Success Factor Profile Section IV: A Final Analysis of the Success of Cisco Systems A. The Success of Business Strategy and IT used to Date B. The Effective Position of the Company for Future Performance Bibliography Objective The objective of this paper is to analyze how Cisco Systems gained competitive advantage in the networking industry through the use of information systems and key business strategies. ...
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