Cisco Systems, Inc.Cisco Systems, Inc.  NASDAQ:CSCONASDAQ:CSCO

Shayne Heffernan of Ebeling Heffernan has issued a strong buy on Cisco Systems, Inc. Nasdaq:CSCO with a price target of $32 in 2011.

Markets over reacted to Cisco Systems, Inc. news, that day shares declined $3.97, or 16 percent, to $20.52.Cisco Systems, Inc. tumbled after its profit and sales forecast fell short of analysts’ estimates because of increased competition and lower government spending. The drop wiped out all of Cisco’s gains since Sept. 2.

But, not everyone was a seller, late in the day the options market for Cisco came to life, Cisco options traded 19 times the monthly average as traders rushed to buy Cisco.

There is little doubt that the world’s largest computer networking-equipment maker will rebound, yesterdays over reaction was the biggest drop since July 1994.

In The News

Cisco Systems, Inc. Plans Combined TV, Web Video Set Top Box-WSJTuesday, 4 Jan 2011 08:35pm EST Wall Street Journal reported that Cisco Systems, Inc. plans to unveil a television set-top box that combines elements of Web video services with live, on-demand and recorded TV. Citing unnamed people familiar with the matter, the Journal said on Tuesday that Cisco would sell the hybrid boxes to cable operators, helping them to fight off competitors offering online video services.

Cisco Systems, Inc., incorporated in December 1984, designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry and provide services associated with these products and their use.

The Company provides a line of products for transporting data, voice, and video within buildings, across campuses, and around the world. Its products are designed to transform how people connect, communicate, and collaborate. Its products are installed at enterprise businesses, public institutions, telecommunications companies, commercial businesses, and personal residences.

The Company has five segments: United States and Canada, European Markets, Emerging Markets, Asia Pacific, and Japan. The Emerging Markets theater consists of Eastern Europe, Latin America, the Middle East and Africa, and Russia and the Commonwealth of Independent States. In December 2009, the Company announced that it controlled approximately 89% of interest in Tandberg ASA.

In December 2009, the Company completed its acquisition of Starent Networks, a supplier of Internet protocol (IP)-based mobile infrastructure solutions targeting mobile and converged carriers. In December 2009, the Company acquired ScanSafe, Inc. (ScanSafe) based in London and San Francisco.

ScanSafe is a software-as-a-service (SaaS) Web security solutions for organizations ranging from global enterprises to small businesses. In June 2010, the Company acquired MOTO Development Group. In September 2010, the Company acquired Arch Rock Corporation. In September 2010, the Company acquired ExtendMedia. In December 2010, the Company acquired LineSider Technologies, Inc.

The Company’s product offerings fall into three categories: its core technologies, routing and switching; advanced technologies, and other products. In addition to its product offerings, the Company provides a range of service offerings, technical support services and advanced services. The advanced services program supports networking devices, applications, solutions, and complete infrastructures.

Support/Resistance

Type Value Conf.

resist. 24.77 2

resist. 24.49 4

resist. 23.63 2

resist. 22.93 6

resist. 22.49 4

resist. 21.85 2

resist. 21.53 2

resist. 21.22 4

supp 20.11 16

supp 19.44 2

supp 19.14 4

Chart IndicatorsInd. short Inter LongEMA VBu Bu NMACD VBu Be VBeRSI BuTDD BuFibs VBu VBe VBeHighs N N NLows N N BeTrends Bu N NStoch. VBu

Valuation Ratios

  Company Industry Sector S&P 500

P/E Ratio (TTM) 15.36 26.65 24.52 18.27

P/E High - Last 5 Yrs. 24.75 50.82 60.59 49.69

P/E Low - Last 5 Yrs. 17.17 10.90 11.81 12.86

Beta 1.25 1.20 1.05 1.32

Price to Sales (TTM) 2.78 1.42 2.92 2.20

Price to Book (MRQ) 2.62 1.55 3.84 2.90

Price to Tangible Book (MRQ) 4.69 2.58 4.62 7.51

Price to Cash Flow (TTM) 11.54 13.17 9.80 11.08

Price to Free Cash Flow (TTM) 12.65 25.11 16.64 53.18

% Owned Institutions -- -- -- --

Growth Rates

  Company Industry Sector S&P 500

Sales (MRQ) vs Qtr. 1 Yr. Ago 19.17 12.24 57.01 9.27

Sales (TTM) vs TTM 1 Yr. Ago 20.00 10.27 18.14 9.16

Sales - 5 Yr. Growth Rate 10.05 9.56 14.22 9.91

EPS (MRQ) vs Qtr. 1 Yr. Ago 11.73 116.25 -246.27 4.44

EPS (TTM) vs TTM 1 Yr. Ago 39.35 -- -- --

EPS - 5 Yr. Growth Rate 8.87 2.34 11.44 6.60

Capital Spending - 5 Yr. Growth Rate 7.81 6.43 0.48 4.65

Financial Strength

  Company Industry Sector S&P 500

Quick Ratio (MRQ) 2.70 1.80 1.13 0.65

Current Ratio (MRQ) 2.78 2.17 2.19 0.96

LT Debt to Equity (MRQ) 27.34 20.71 14.59 121.39

Total Debt to Equity (MRQ) 34.20 32.95 23.05 178.72

Interest Coverage (TTM) -- 19.59 1.46 16.21

Profitability Ratios

  Company Industry Sector S&P 500

Gross Margin (TTM) 63.47 31.72 31.13 31.53

Gross Margin - 5 Yr. Avg. 64.26 31.36 36.88 28.34

EBITD Margin (TTM) 27.64 -- -- --

EBITD - 5 Yr. Avg 27.83 11.23 24.14 17.99

Operating Margin (TTM) 22.48 7.11 13.25 --

Operating Margin - 5 Yr. Avg. 23.20 7.54 14.21 16.23

Pre-Tax Margin (TTM) 22.99 7.30 13.79 14.42

Pre-Tax Margin - 5 Yr. Avg. 24.82 8.15 12.75 15.85

Net Profit Margin (TTM) 18.94 5.41 10.33 10.71

Net Profit Margin - 5 Yr. Avg. 19.47 5.48 9.80 11.62

Effective Tax Rate (TTM) 17.61 30.02 21.74 53.38

Effecitve Tax Rate - 5 Yr. Avg. 21.57 28.36 28.63 25.17

Contact Details:

Chutinush Taksinapinunt

Business Development Director

Heffernan Capital Management

Email: chutinush@heffernan-inc.com

Chutinush Taksinapinunt holds a Bachelor of Business Administrators degree Majoring in Finance and Banking. Chutinush Taksinapinunt is an experienced market maker and Portfolio Manager, having worked with some of Thailand’s largest Securities Company and Financial Institutions.

Price Estimate by Shayne Heffernan PhD

Shayne Heffernan of Ebeling Heffernan holds a PhD in Economics serves as CEO of Heffernan Holdings Inc and Co Founder of Ebeling Heffernan www.ebeling-heffernan.com

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