Cisco (CSCO) has struggled quite a bit recently. This year, it reached a high of 22.34 on 2/7/11 and has steadily declined since. In mid 2010, it was over 28. The stock reached a low of 13.30 on 8/9/11. It just seemed that Cisco could not get any love on Wall Street. As the stock got lower, many viewed it as a value play. Unfortunately, it has been a value trap for the last few years.
The growth estimate for the next 5 years is 9.87% per year. Not bad for a company of Cisco's size. Its P/E is 9 compared with 19.41 for the industry. Its PEG is 0.91 compared with 1.15 for the industry. Both metrics suggest Cisco is undervalued. Cisco recently also started to focus more on its main business after several acquisitions in the consumer sector. It will take some time to see the results. But is now the right time to buy?
I think now may indeed be the time to buy Cisco. The price action recently suggests the stock may be poised for a breakout. This combined with the fact that the stock is dirt cheap really makes Cisco an attractive buy.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in CSCO over the next 72 hours.