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Enthusiasts Cisco: Does the network specialist come from the shadow of the tech giants?

18:00  05 december  2022
18:00  05 december  2022 Source:   de.extraetf.com

Twitter buyout: shareholders vote for the project of Elon Musk

 Twitter buyout: shareholders vote for the project of Elon Musk © Michaelvi/Adobe Stock Twitter Association: shareholders vote for the project of Elon Musk The shareholders of the social network approved the buyout agreement From the platform by Elon Musk, one month before the opening of the trial that Twitter launched against the multimillionaire to force him to honor his commitment.

Cisco has flown somewhat under the radar of investors in recent years. Are there any favorable chances of getting started for investors?

  Cisco: Tritt der Netzwerk-Spezialist aus dem Schatten der Tech-Giganten? © provided by Extraetf

in the middle of the Dotcom bubble, Cisco was still the most valuable company in the world in March 2000. At that time, the stock reached a market capitalization of $ 579 billion. The investment was not very pleased with the shareholders at the time, after all, the stock market capitalization is only $ 204 billion in early December. Cisco was simply overrated 22 years ago, but could offer an interesting opportunity today.

In the latest annual quarter, Cisco managed to achieve the highest quarterly turnover in the company's history. This is remarkable, since the company was burdened in the last quarters by the tense supply chains in the manufacture of its products. Here, like many other market participants, Cisco sees a certain relaxation.

Interference in private consumption possible: France leads electricity "weather report" an

 Interference in private consumption possible: France leads electricity So that there is no blackout in France in winter, a kind of "weather report" for electricity will soon show when the network is particularly stressed. Ofen and washing machine should then There is no absence. The warm shower can also be turned away from a distance. © dpa electricity pylons are on a field near the Bowy nuclear power plant in central France.

, however, is even more important for Cisco's recent success, the redesign of the business model. Management has managed to continuously increase the proportion of subscriptions in total sales in the past few years. If it was still 25 percent in 2015, it is currently 43 percent. It should even be 50 percent by 2025. This means that the sales of Cisco can be planned much better today, since the company is no longer so dependent on cyclical customer investments in hardware.

What speaks for Cisco? In addition to a slowly growing service business,

particularly contributes to the growing proportion of software sales. Today Cisco generates around 30 percent of its sales with software, which is sold 85 percent as a subscription. In 2017 it was only 20 and 52 percent. In recent years, the proceeds have been more or less stagnating due to the change and lack of willingness to invest. Improvement seems to be in sight for the next few years; By 2025, the company plans to increase sales annually by five to seven percent.

Tech workforce compared to other tech companies,

 Tech workforce compared to other tech companies, Twitter is already a small number, as the statista graphic shows. Around 7,500 people work for the company. That could change soon if it goes to Bald owner Elon Musk . According to a report by the Washington Post , the billionaire wants to get rid of 75 percent of the current workforce. However, the current management is also said to have planned layoffs - just not to this extent. For the users: Inside, these are potentially bad news.

Cisco is the leading provider of network infrastructure for companies with a market share of 41 percent in 2022. Even in the growing business with security applications, the US group is number two on the market with a share of 18 percent.

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The key figures of the tech company look very healthy. The company reported a gross margin of 61 percent and an operational margin of 26 percent for the recent quarter. The net cash (liquid funds after deduction of interest liabilities) is around $ 11 billion. Due to numerous takeovers in the past, there is a very large goodwill position on the active side, but otherwise the business model is not very capital-intensive. Therefore, Cisco can make very high distributions in the form of dividends and stock returns.

In this ETF, Cisco is heavily weighted

for investors who are looking for a broader, growth -stronger commitment in the areas of network and security, the First Trust Nasdaq Cybersecurity ETF Class A (WKN: A2P4HV). With Broadcom and Infosys, Cisco is one of the profitable heavyweights in the ETF. However, there are also portfolio members with Palo Alto Networks or Crowdstrike that grow much faster but have no similar profitability.

As with many thematic ETFs, investors should therefore take a closer look at the companies contained in the index before an investment. After all, with such a product you usually buy not only the winners of a sector, but also its losers.

Twitter: Elon Musk has been looking for a new Twitter boss .
© dpa Tech-billionaire Elon Musk took over Twitter in October. According to insiders, he is now looking for a new boss for the short message service. (Archive image) Elon Musk has long been trying for a new Twitter boss, according to a US media report. The search for a successor was even before the survey initiated by Musk himself about his resignation, reported the US financial channel CNBC on Tuesday, citing insiders.

usr: 1
This is interesting!