Should you buy cisco stock

Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Every day, Wall Street analysts upgrade some stocks, downgrade others, and "initiate coverage" on a few more. But do these analysts even know what they're talking about?

Today, we're taking one high-profile Wall Street pick and putting it under the microscope But here's the really good news: Now that President Donald Trump has laid out his tax plan, one analyst thinks Cisco stock could do even better in the months and years ahead. And for businesses with profits stashed abroad, hidden from the taxman until the day when they can be repatriated at a lower rate?

As Credit Suisse explains in a new note covered by StreetInsider. Cisco is also likely, says Credit Suisse, to shower its shareholders with "capital returns" in the form of dividends and stock buybacks.

And Credit Suisse isn't just speculating here. In Credit Suisse's view, Cisco as-is can already produce "low-single-digit revenue growth" through the portfolio of businesses it owns. Is Credit Suisse right? Maybe, but knowing whether it is right about the scenario described requires one to assume that Credit Suisse is also right about President Trump's chances of getting his tax reform proposal passed by Congress intact -- and that's not a gamble I'm prepared to make.

Rather, I think investors should evaluate Cisco as it stands today.

If Congress and the president later decide to provide us some upside -- great! But if not, I want to know that Cisco stock will still be cheap enough to buy as-is. Thus, at current prices, Cisco stock sells for a debt-adjusted price-to-earnings ratio of With Cisco paying a 3. If and when that happens, I'll revisit the stock's valuation.

But for now, I think Cisco stock is too expensive to buy. Rich Smith has no position in any stocks mentioned.

The Motley Fool recommends Cisco Systems. The Motley Fool has a disclosure policy. I like things that go "boom. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well.

7 reasons why Cisco Systems stock is now a buy - MarketWatch

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AT&T white box test should scare Cisco and Juniper - Business Insider

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