July 17, 2011 Leave a comment
New Trade Idea – Long Cisco Systems (CSCO) Hedged With Short S&P Index Pair Trade In Anticipation Of CSCO Outperforming The S&P 500 Index – Alert Published 06/12 Shiraz Lakhi
I am currently long Cisco Systems (symbol: CSCO), based on strong fundamental argument to the upside (click on article below, to view analysis). The long position in CSCO IS fully hedged via dollar-neutral long CSCO/short SPY pair trade strategy, in anticipation of CSCO outperforming the S&P 500 index.
Cisco Systems, a tech company operating within the networking and communication devices industry, generates a current free-cash-flow of $9.25 billion (based on trailing 12 month data), with an enterprise-value of $58.1 billion. The free-cash-flow-yield (FCF/EV) is therefore 15.9%, offering strong upside. Additional positives in favor of CSCO include a book-to-market (based on historical cost) of 0.55, a low (relative to industry) price/cash ratio of 1.96, and a low debt/equity ratio of 0.81 – by Shiraz Lakhi.