Friday, 11 May 2012

Cisco continues to travail but never arrive!

I note that Cisco remains a volatile prospect after company guidance to reduce profit forecasts triggered yet another fall in the share price to $16.81, -$1.97 (-10.49%), which once again reverses a recent renaissance.
That's yet another striking pattern of optimistic recovery trend and cliff jumping reversal in the near 2 years that I have bought (31 Aug.10), binned (30 Aug. 11), and been aware of them.

The company continues to be a leader in its field and, with its hardware, could yet be the biggest beneficiary of the touted capacity busting increase in data traffic that is changing our lives. 
The company has frequently cited recessionary pressure on spending budgets as a temporary hit to its revenues and this could still be the issue but the longer this goes on the company also risks being engulfed by rivals catching up on technology and operating with lower margins.
Cisco does look to have made moves to address this through cost cutting and focus, hence its latest recovery trend, but this most recent disappointment might suggest that it has more fundamental strategic decisions to make.

On a positive note (for me at least), and despite my disappointment at selling them, it does seem to underline my decision to exit them. 
Although, with such a strong cycle of rise and fall, it might provide a trading opportunity for someone other than me.
Freaky that my ownership of them was within 1 day of being exactly 12 months though.

Related posts:
US Investment update: Cisco

No comments:

Post a Comment