Cisco Systems Inc (NASDAQ:CSCO) reported a strong first quarter fiscal year 2012 report and a solid second quarter fiscal 2012 guidance on Thursday. The company’s ensuing conference call included a lot of talk about its about strong switch and router orders, and improving switch margins.
Analysts responded to the news with Citi, Deutsche Bank and Raymond James upgrading the stock. While its second quarter fiscal 2012 brings low expectations, Citi believes that the company has shown improved growth and its margins that may lead to expansion.
This led to a Buy rating.
Jefferies’ analyst Mark Lipacis also jumped on a positive Cisco bandwagon, citing the report as a positive for the company’s chip suppliers and noting that Cisco and others could see rebuilt chip inventories in the first half of 2012. He sees semiconductor revenue growth picking up in 2012.
Cisco’s (NASDAQ:CSCO) week of good news ended on a note from the fund side of the business.
Mutual Fund manager Donald Yacktman continues to defy the odds and still makes money for his clients from the two funds that he manages: Yacktman and Yacktman Focused. He has beaten 96 percent of peers this year and and “at least 95 percent for the past 5 and 10 years through 0ct. 21,” according to a Morningstar (NASDAQ:MORN) report.
Cisco is one of his fund’s largest holdings but Yacktman expressed some skepticism about it even though it’s helped his fund’s performance.
If someone had told me 10 years ago that these stocks would be in my portfolio, I would have laughed,” Yacktman says. The former highfliers have fallen so far that they’re now attractive, he says. Microsoft (NASDAQ:MSFT) has lost about half its value since 1999. Cisco is down more than 70 percent.
The company’s good news also spurred a slight rally in networking stocks on Thursday, but nothing to write home about.