Cisco (CSCO) Offering Possible 15.21% Return Over the Next 20 Calendar Days

Cisco's most recent trend suggests a bearish bias. One trading opportunity on Cisco is a Bear Call Spread using a strike $48.00 short call and a strike $53.00 long call offers a potential 15.21% return on risk over the next 20 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $48.00 by expiration. The full premium credit of $0.66 would be kept by the premium seller. The risk of $4.34 would be incurred if the stock rose above the $53.00 long call strike price.

The 5-day moving average is moving down which suggests that the short-term momentum for Cisco is bearish and the probability of a decline in share price is higher if the stock starts trending.

The 20-day moving average is moving down which suggests that the medium-term momentum for Cisco is bearish.

The RSI indicator is at 33.5 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

LATEST NEWS for Cisco

Dow Jones Today: China Confirmation Proves Meaningful
Thu, 29 Aug 2019 20:15:27 +0000
Earlier this week, stocks rallied on encouraging comments from President Donald Trump about trade talks with China. Of course, the rally was nice, but it was accompanied by doubts, confirmed by some Chinese media, that the president hadn't actually talked to anyone in China about cooling off the long-running tensions.Source: rafapress / Shutterstock.com Fortunately, that confirmation emerged today that two sides are indeed discussing trade and that helped stocks focus on something other than the second-quarter GDP revision, was pared down to growth of 2.1%. There was some good news in that GDP report that indicates the oft-discussed recession isn't as imminent as previously thought. * 7 Stocks to Buy Down 10% in the Past Week Second-quarter consumer spending surged 4.7%, above the 4.3% forecast in July, good for the best reading in five years. That coupled with the trade talks sent the Nasdaq Composite higher by 1.48% while the S&P 500 gained 1.27%. The Dow Jones Industrial Average got in on the fun with a Thursday gain of 1.25%.InvestorPlace – Stock Market News, Stock Advice & Trading TipsIn late trading, 25 of the 30 Dow members were trading higher, indicating broad-based strength in the blue chip index today. Tech TalkAs always, it's good to see technology stocks lead a rally. That was the case today with Microsoft (NASDAQ:MSFT) gaining 1.89%. Already one of the best-performing stocks in the Dow this year, Microsoft was boosted today by some positive analyst commentary with Wedbush Securities analyst Daniel Ives reiterating an "outperform" rating on the shares, citing strength in the Azure cloud business."We are bullish on MSFT over the next year given our thesis that Azure's cloud momentum is still in its early days of playing out within the company's massive installed base," said Ives in a note.Apple (NASDAQ:AAPL) was another solid Dow technology performer today, adding 1.69% after the company announced a Sept. 10 event to reveal the latest iPhone."Apple typically puts new iPhones on sale within two weeks following their launch and rolls out the accompanying software update a few days after showing off the devices," reports Bloomberg. "The new iPhones will be key to Apple's holiday quarter." Careful With This BounceCaterpillar (NYSE:CAT) was the best-performing member of the Dow today with a gain of 2.69%, not a surprising move given this stock's level of tariff sensitivity. There are still some structural issues in the industrial sector and President Trump's willingness to rapidly reverse course on trade has previously punished cyclical names like Caterpillar.Another bounce I'd caution on is that of the financials, particularly on a day when Bank of America (NYSE:BAC), formerly though not currently a Dow component, was hit with a downgrade due to rising concern about net interest margins. That is not a scenario that's specific to BAC shares. Dow Jones Bottom LineI wanted to save this for tomorrow, the last trading day of the month, but I'll roll it out today. Historically, September is the worst month of the year for stocks with the S&P 500 averaging a September decline of 1.1% over the past two decades.However, a couple of Dow stocks are among the best S&P 500 performers in September over the past decade. Those names are Cisco (NASDAQ:CSCO) and Boeing (NYSE:BA).Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy Down 10% in the Past Week * 15 Retail Survivors to Buy for the Long Run * 7 Stocks That Wall Street Thinks Could Rise 50% Or More The post Dow Jones Today: China Confirmation Proves Meaningful appeared first on InvestorPlace.

Stock Market Jumps On U.S.-China Trade News; Dollar General Soars On Earnings
Thu, 29 Aug 2019 14:13:38 +0000
The Dow Jones industrials gained 275 points in today's stock market rally. Dollar General staged a bullish breakaway gap on earnings.

Cisco Announces September 2019 Events with the Financial Community
Wed, 28 Aug 2019 12:00:00 +0000
SAN JOSE, Calif , Aug. 28, 2019 /PRNewswire/ — Cisco today announced that it will participate in the following conferences with the financial community during the month of September. Sessions which offer …

HPE Stock Rose Due to Earnings Beat, Raised Guidance
Wed, 28 Aug 2019 11:40:07 +0000
On Tuesday, HPE reported upbeat second-quarter earnings after the market bell. The stock gained 5.57% in after-hours trading.

Wait for the Trade War to Play Out Before Buying Cisco Stock
Wed, 28 Aug 2019 10:00:18 +0000
Cisco (NASDAQ:CSCO) has had a tough August. Shares are down over 17% in the past month, from an open of $56.69 on July 29 to $47.10 at the close Aug. 26. The earnings release on Aug. 15 met analyst expectations. But with next-quarter guidance projecting minimal growth, investors are having second thoughts on the future of CSCO stock.Source: Ken Wolter / Shutterstock.com With this in mind, is CSCO a buy? The stock trades at a fair valuation. But with geopolitical risks like the U.S.-China trade war and anticipated declines in share buybacks, it may be tough to find upside. Let's take a closer look at the present and future performance of Cisco stock. A Closer Look at Cisco StockAs mentioned above, CSCO announced earnings on Aug. 15. Sales for the quarter ending July 27 were up 6% year-over-year, with full-year revenue up 7% from the prior fiscal year. Revenue growth was driven by the company's Security (up 14%), Applications (up 11%) and Infrastructure (up 6%) units. Software-as-a-service style software subscriptions now make up 70% of total software revenue. But the company does not anticipate high growth in the next quarter. CSCO projects 0%-2% year-over-year revenue growth and earnings per share between $0.64-$0.69.InvestorPlace – Stock Market News, Stock Advice & Trading TipsHow about the elephant in the room (the U.S.-China trade war)? Sales in China were down 25%. As the trade war continues to accelerate, revenue decline could continue. Any year-over-year decline in total revenue would materially impact Cisco stock. * 10 Companies Using AI to Grow In light of this, what positive catalysts are in the pipeline for CSCO stock? CSCO recently concluded a buyback plan initiated back in FY18. During that time frame, the company bought back $32.6 billion worth of Cisco stock. The company plans to continue to return capital to shareholders, albeit with a lower level of buybacks. The company plans to devote at least 50% of free cash flow to both share buybacks and dividends. Net of capital expenditures, the company has up to $14.9 billion a year in cash flow. Subtracting $6 billion per year in dividends, this leaves about $8.9 billion max for buybacks. Can Acquisitions Help CSCO Move the Needle?CSCO has $33.4 billion in cash on hand. With the company stepping off the gas pedal for buybacks, acquisitions could be their key to growth. The company announced a deal to buy Acacia Communications (NASDAQ:ACIA) in July. As InvestorPlace's James Brumley discussed Aug. 1, this proposed $2.6 billion deal solidifies CSCO as a 5G hardware supplier. Acacia's products help facilitate long-distance transfer of massive data loads.Once 5G reaches critical mass, CSCO will be in the thick of it, supplying hardware to keep the data flowing across the globe.CSCO has made additional bolt-on deals since 2018. As Brumley discussed, the company has acquired Sentryo, Singularity Networks and six other companies. These bolt-on deals take just a few billion, tops, to execute, leaving plenty of runway for CSCO to grow via mergers and acquisitions. But does the current Cisco stock valuation price in this opportunity?Let's take a look at how the stock's valuation stacks up to peers. Cisco Stock Is Undervalued to PeersCSCO stock currently trades at a forward price-to-earnings ratio of 13.1. The company's current enterprise value/EBITDA ratio is 11.7. Here are the current valuation ratios of some of CSCO's closest peers: * Ciena (NYSE:CIEN): forward P/E of 16, EV/EBITDA of 13.4 * Motorola (NYSE:MSI): forward P/E of 20.1, EV/EBITDA of 17.3 * Nokia (NYSE:NOK): forward P/E of 12, EV/EBITDA of 9.5 * LM Ericsson (NASDAQ:ERIC): forward P/E of 15.8, EV/EBITDA of 11.1On a P/E basis, CSCO stock trades at a discount to the aforementioned peers. On an EV/EBITDA basis, Cisco stock trades in line with its larger peers NOK and ERIC. I believe this is a fair valuation for CSCO stock. While the company could jump start growth via its bolt-on acquisitions, the company's weak short-term guidance is a concern. Coupled with the China risk, I can see CSCO stock falling further. Other legacy tech companies such as Intel (NASDAQ:INTC) and International Business Machine (NYSE:IBM) trade at forward P/E ratios around 10. I could easily see CSCO stock fall to that valuation level. The Bottom Line on Cisco StockThe China situation has taken a toll on Cisco stock. The company's China operations are just a small part of the business. But if sales continue to fall, the company will have a hard time even meeting its low-ball guidance next quarter. Relative to peers, Cisco stock trades at a fair valuation. But with the growth issues, I can easily see CSCO stock start to trade at a lower valuation.So what's the bottom line? Investors should wait out the China situation. Additional Chinese sales declines could push the stock further down. But long term, the company's mergers and acquisitions strategy could help resurrect growth as 5G becomes the standard. Wait for the trade war to reach its nadir before entering CSCO stock.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Companies Using AI to Grow * The 10 Biggest Winners From Second-Quarter Earnings * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post Wait for the Trade War to Play Out Before Buying Cisco Stock appeared first on InvestorPlace.

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.