Cisco (CSCO), the giant networker, looks poised for a breakout on the longer-term chart. The 200-month moving average is $22.01 and the stock has not traded decisively above that key level since early 2010.
Fundamentally, at $22 per share, CSCO is trading 11(x) 2013’s expected earnings per share of $1.99, and 10(x) 2014’s expected eps of $2.11 for expected growth this year and next of 7.5% and 6%.
Expectations are so low for the networker, I would fully expect earnings growth to come in ahead of the current estimates. Subtracting out CSCO’s balance sheet hoard, CSCO is trading at 6(x) cash-flow.
If the stock clears $22 and with a decent market as a tailwind, I think it could eventually run into the high $20’s.