Reply to the 2 attached DB post 200 words each

Cisco Systems, Inc. (CSCO), is at the forefront of global IT and networking processes, according to its website. The company embodies corporate social responsibility through its mission to “empower social change agents with technology and expertise,” leading to the culmination of its goal: “Accelerate global problem solving to benefit people, society, and the planet” (“Corporate Social Responsibility,” Cisco Website). For a cyber-rich world, Information Technology is a valuable industry that is anticipated to continue its rapid expansion in years to come. Cisco is a recognizable name amongst the vast array of choices.

Lobao, Pacheco, & Pereira (2017) studied the incorporation of recognition heuristics in the decision-making process people tend to use in selecting stocks. They conducted a study (and referenced several others who replicated it) in which participants chose stocks based solely on name recognition, without any previous financial prowess or knowledge. The conflicting results from the conglomeration of their findings indicated that a market portfolio can often do better – although not always – than handpicked selections based solely on familiarity. Their overarching conclusion was that there is a lack of agreement amongst analysts in regards to this research, but that typically a more balanced portfolio does better than one compiled more simply from well-known names (Lobao et al., 2017). However, Cisco remains a solid choice beyond mere name recognition, as it holds a staunch position on its global platform in the Information Technology realm.

As an industry leader, Cisco (CSCO) boasts a healthy growth pattern and solid portfolio. Over the past four quarters alone, Cisco has met or surpassed its estimated earnings. Its profit margin is 20.26%, with an operating margin of 26.20%. The quarterly earnings growth came in at 3.10%. Cisco’s total cash amount is listed as 71.59B, with its total debt at 35.93B. The five-year average dividend yield was 2.93, with a payout ratio of 58.85% to stockholders, which is considered to be in the high range. Though it had some declines in revenues over a few years, Cisco appears to be in a period of transition as it recently accumulated a cloud-based business and continues to focus on innovation and connectedness, all while maintaining a steady increase in cash flow. Their annual year-end report from 2017 details an increased spotlight on services and software, notating incorporation of modern technologies through machine learning and the launch of their new intuitive network geared towards increased security for privacy across the board and specifically in handling cyber attacks (“Annual Report,” 2017). Analysts indicate an expectation of continued positive growth over the next five years, so Cisco appears to be a solid investment choice particularly when investing for the longer-term.

References

Annual Report. (2017). Cisco Systems, Inc. Website. Retrieved from: https://www.cisco.com/c/dam/en_us/about/annual-report/2017-annual-report-full.PDF

Cisco Systems, Inc. (CSCO). (2017). Profile, Business Summary. Yahoo! Finance. Retrieved from: https://finance.yahoo.com/quote/CSCO/analysts?p=CSCO

Corporate Social Responsibility. (n.d.). Cisco Systems, Inc. Website. Retrieved from: https://www.cisco.com/c/en/us/about/csr.html

Lobao, J., Pacheco, L., & Pereira, C. (2017). The Use of the Recognition Heuristic As An Investment Strategy in European Stockmarkets. Journal of Economics, Finance & Administrative Science, 22(43), 207-223. doi:10.1108/JEFAS-01-2017-0013. Retrieved from: http://ezproxy.liberty.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=126618683&site=ehost-live&scope=site