Companies that have fought their way out of the economic downturn, the ones that have been nimble footed and have chosen to diversify, are the ones that investors have loved this year. These companies have led market gains in the first half of the year, returning anywhere between 6 to 16 percent while the S&P 500 is up 6 percent and the Dow Jones Industrial Average has risen 2.27 percent since January.
Cisco Systems (NASDAQ:CSCO)
Cisco investors this year have been rewarded for keeping their expectations low. Shares of the network equipment maker are up 4 percent this year to date thanks in large part to first-quarter results that weren’t as bad as expected.
Cisco sales were badly hit last year from weak in demand from developing economies like Brazil, Russia, and China. However, the company reported that bookings have exceeded sales in the second quarter in the U.S. and that sales may dip by only 1 to 3 percent from last year. Cisco had reported a 5.5 percent year-over-year decline in net profits to $2.2 billion in the first quarter.
Cisco’s $1 billion foray into cloud computing and progress on new forecasting tools has also helped excite investors. To sweeten the deal, the company also rewarded shareholders with a dividend of 19 cents per share and bought back 90 million shares.