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 (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 (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.
(click to enlarge)
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.