Ticker: NASDAQ: CSCO Sector: Technology Recommendations: Strong Buy
Price: USD $23 Industry: Networking Price Target: USD $32.50
Highlights:
Absolute Return
Target Price $32.50
Current Price $23
Upside Potential 50%
I recommend a strong buy on Cisco’s stock with a target price of $32.50, a 50% upside from its current price. Cisco has a solid competitive advantage, because there are not many strong competitors in the market. The other firms show a higher P/E ratio than Cisco because they have a lower market share. The company shows a constant growth. Cisco markets its products globally with the highest market shares than its competitors. The main risks for Cisco are worsening of economic conditions or exchange rates. The company has a good growth in sales, which will lead higher profits. The company also gives out an annualized dividend to its shareholders every year.
Business Description:
Cisco Designs, manufactures, and sells Internet Protocol (IP) - based networking and other products related to the communications and information technology (IT) industry and provide services associated with these products and their use. The company provides products for transporting data, voice within buildings, across campuses and globally. The products are utilized at enterprise businesses, public institutions, telecommunications companies and other service providers, commercial businesses, and personal residences. Cisco conducts its business globally and manages its business geographically. Its business is divided into the following three geographic segments: The Americans; Europe, M...
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...d the cost of equity I made a sensitivity analysis chart for Cisco through which I came up with the target price of $32.50. This chart shows the different price ranges of the stock which could be possible if the Terminal Value Perpetuity Growth Rate went higher or lower compared to the Cost of Equity.
Based on the Terminal P/E and the cost of equity I made a sensitivity analysis chart through which I came up with a price of $33.37. This chart shows the different price ranges of the stock which could be possible if the Terminal P/E went higher or lower compared to the Cost of Equity.
Comparing both the charts above I think the target price of $32.50 is accurate for the company’s stock.
Works Cited
• http://secfilings.nasdaq.com/edgar_conv_html%2f2013%2f09%2f10%2f0000858877-13-000049.html#FIS_BUSINESS
• http://www.nasdaq.com
• http://www.cisco.com/
Year over year, Target Corp. has been able to grow revenues from $51.3B to $57.9B. Most impressively, the company has been able to reduce the percentage of sales devoted to cost of goods sold from 69.64% to 69.29%. This was a driver that led to a bottom line growth from $2.4B to $2.8B. Target outperformed (corporate governance quotient) 85.5 % of S&P 500 companies and 97.7 % of discount retail stores. The corporate governance quotient incorporates the values of transparency, accountability, integrity, and responsibility towards maximizing shareholder value. Yahoo analysts opinions mean recommendation is currently a 2.2, indicating moderate buy to hold (a 1.0 is a strong buy and a 5.0 is a strong sell).
My conclusion is that the protagonist should buy more stock of Costco Wholesale Corporation as she concluded the company is growing at manageable rate without relying on debt or equity. They are with high sales or profit, low labor costs, and consistent growth. Costco seems to be a low risk stock that is performing well with long term stability for more
Nowadays, with competition between companies higher than ever, stock prices of individual companies fluctuate more than ever. You really have to know the company you are investing in and know their history. My team in “The Stock Market Game” made investments in two promising companies. Apple stock has slowly, but steadily rose over the past 10 years and we choose this stock simply because we needed a stock that was stable and reliable. The other company we picked was Dollar Tree Inc, this stock was slightly less reliable and had a bigger risk but it shows to be a promising investment in the near future. If I were to find two companies to make long term investments in, It would be these.
Based on the information in the case, Pepsi could invest US$360 million in exchange for 30% equity of Deltex. So we have to calculate the value of 30% equity of Deltex. First, we calculated the discount factor by using average unlevered beta of US independent bottlers, US 10 year Treasury bond as risk free rate and assuming market risk premium 10%. We came up with 9.83% of WACC. Next, we calculated Deltex free cash flow and terminal value and then converted them into US dollar value. Now with WACC and total cash flow, we had NPV of the company. So we deducted current debt from NPV and came up with the value of US$360M investment equal to 59.99% of Deltex equity. So the proposal to buy 30% of Deltex with US$360M is too expensive to PepsiCo and not attractive to PepsiCo.
Warren Buffet once said, “Price is what you pay, value is what you get.” These words have a very significant meaning when a business is looking to make a major decision. Everyone knows the price of buying a new piece of equipment, but very few understand the value. When searching for large growth opportunities it is the value of the equipment that matters, not the price tag. For your company, the Toyo Jidoki TT-9CW offers value far beyond the numbers on the price tag.
With resources such as oil beginning to dwindle, the world has begun to look for other resources that are both environmental friendly and sustainable. By studying the past five quarters of financial reports for NextEra, it came as no surprise that this stock would produce a profit over the five weeks. On an adjusted basis, NextEra’s 2015 fourth-quarter earnings were $539 million, or $1.17 per share, compared to $458 million, or $1.03 per share, in the fourth-quarter of 2014. For the full year 2015, NextEra’s earnings on an adjusted basis were $2.6 billion, or $5.71 per share, compared to $2.3 billion, or $5.30 per share, in 2014. As for 2016, NextEra’s first-quarter earnings on an adjusted basis were $715 million, or $1.55 per share, compared to $631 million, or $1.41 per share, in the first-quarter of 2015. NextEra Energy continues to expect adjusted earnings per share to be in the range of $5.85 to $6.35 for 2016 and in the range of $6.60 to $7.10 for 2018, implying a compound annual growth rate of 6 to 8 percent per year through 2018, off a 2014 base. With this outlook, I would purchase this stock in the
Value indication is based on TTM EBITDA of $207mm at 7.6 times (multiple is per Jan 2015 NYU Stern study based on 56 global E&C business). Backing out
The Company recently raised its dividend, now $0.96 on an annualized basis. This dividend may provide some downside support.
Once the Audi stock would have increased I would have sold it because it is just going on downward hill towards the bottom. I also had a feeling it would not recover back to the number it was in week one. I did expect to lose money but not as fast as the stock was going down. It did make a bit of recovery in week four and that is when I would have sold. That is the only stock that I would sell because every other stock did not do as bad as Audi did.
The averaged price/earnings (P/E) ratios for ADCT are 36, 36.3, 39.4, 27.5, and 64.1 for years 1995-1999 respectively. The P/E ratio for ADCT is very stable from 1995 to 1997. In 1998, the P/E ratio fell over 43% to 27.5. The P/E ratio then rocketed to 64.1 in 1999, a 57% increase in one year. This dramatic increase indicates current investors are placing more value on future earnings as compared to previous years. One-reason ADCT investors pay more to own the stock is the growth potential in the communication equipment sector. For example, Internet traffic doubles every 100 days, illustrating the growth potential for ADCT's sales and bottom line earnings (Annual Report, 1999). Investors are currently willing to buy the stock at an inflated price due to two main reasons, the company's future earning potential and present growth rate in the industry.
Recommendation of this stock as an investment opportunity. Support rationale with resources such as peer-reviewed articles or material from the Strayer
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Recommend whether you believe that this firm should or should not cut its price to increase its market share. Provide support for your recommendation.
PER EMPLOYEE $574.29K P/E RATIO 22.84 EPS $5.92 YIELD 2.49% DIVIDEND $0.84 EX-DIVIDEND DATE Aug 25, 2017 SHORT INTEREST 15.9M 06/30/17 % OF FLOAT SHORTED 0.59% AVERAGE VOLUME 5.7
During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program that had been proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis’s cost of capital. Jones has provided you with the following data, which she believes may be relevant to your task.