Cisco will be reporting earnings 11/13 after the bell. Although the company is no longer the market-moving bellwether it once was, the market still takes John Chambers' words seriously. People are expecting quite a big move after the report, with the move expected to be 3.5-5%. Most of the Street has a buy or neutral rating on the stock.
Cisco (NASDAQ:CSCO) is a manufacturer or IP networking equipment. It has a market cap of $91 billion and $46B of that is net cash (35%). It trades at a P/E of 9, so it's not exactly expensive. I would own this stock because of its monopolistic power. Cisco is number one in nearly all of the spaces it competes in by a long shot. Its next largest competitor is Juniper Networks (NYSE:JNPR) which it dwarfs in market cap as well as in market share.
Although the company has been big on buybacks, it recently had a change of heart and has become more shareholder-friendly. It sports a 3.3% dividend, which it recently raised. My main concern with this company is management. Cisco has tarnished itself as a tech bellwether and the company has a problem issuing management stock. I believe the balance sheet makes up for this however.
For the past year, the stock has been range bound between $15 and $20. I find this company to be a value at $16 due to its great balance sheet and dividend yield.
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My play before earnings would be to sell the $16 strike put for November 17 expiration. It currently trades for .27 which is a yield of 1.7%. It also buffers you from nearly a full dollar of downside and would allow you to get a great deal on the stock price.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.