Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Sep 09, 2019
Post-Earnings selloff on Cisco Systems presenting buying opportunity

Post-Earnings selloff on Cisco Systems presenting buying opportunity

Tech giant Cisco Systems (Nasdaq: CSCO) reported earnings after the closing bell back on August 14. The company beat EPS estimates and revenue estimates, but it issued soft guidance. The company cited the ongoing trade war as the reason for the softer guidance and investors weren’t happy about that. The stock dropped 8.6% on August 15.

Looking at the weekly chart for Cisco we see a couple of important factors are coming in to play. First, the stock dropped below its 52-week moving average and this is only the second time in the last two years the stock has been below the 52-week. It was below the moving average for a brief period at the end of December and beginning of January, but the stock rallied from there.

The second factor that jumps out from the chart is the location of the weekly stochastic readings. The indicators are in oversold territory and they are at their lowest level for the last three and a half years. More importantly, the indicators just made a bullish crossover and that could be a good sign for the stock. Looking at the other bullish crossovers from the past few years, each one appears to have been a good time to buy.

Looking at the 10-week RSI we see that it was at its lowest level for the last three and a half years as well. This indicator has also turned higher and that could mean that the stock is shifting from a downward trend to an upward trend.

The Tickeron Technical Analysis Overview looks at the daily indicators and several of them are pointing toward a bullish move as well.

 The daily stochastic indicator suggests the ticker price trend may be in a reversal from a downward trend to an upward trend. In 28 of 47 cases where Cisco's stochastic indicator exited the oversold zone it resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued uptrend are 60%.

The RSI Indicator points to a transition from a downtrend to an uptrend -- in cases where Cisco's RSI indicator exited the oversold zone, 7 of 12 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued uptrend are 58%.

The lower Bollinger Band was broken -- a price increase is expected as the ticker heads toward the middle band, which indicates a buy or call consideration for traders. In 21 of 37 cases where Cisco's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued uptrend are 57%.

From a fundamental perspective, Cisco has performed well over the last few years. Earnings have grown at a steady pace of 9% annually over the last three years. Earnings increased by 19% in the most recent quarterly report.

The company’s management efficiency measurements are really strong with a return on equity of 35.9% and a profit margin of 32.6%. The Tickeron SMR rating for this company is 19, indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.

In addition to the strong SMR rating, the Tickeron Valuation Rating of 7 indicates that the company is seriously undervalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.

The sentiment toward Cisco has been changing over the last few months. There are 27 analysts following the stock at this time and 17 have the stock rated as a “buy” while 10 rate the company as a “hold”. Two months ago there were 20”buy” ratings and seven “hold” ratings.

The short interest ratio dropped to 1.42 recently, but both the number of shares sold short and the average daily trading volume changed drastically. The number of shares sold short fell from 43.1 million to 37.9 million and that had a negative impact on the ratio. However, the average daily trading volume jumped from 12.9 million to 26.8 million and that may have had an even greater impact on the drop in the short interest ratio.

Related Tickers: CSCO
Related Portfolios: TECHNOLOGY ETFs
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

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Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
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Is Ethereum’s Bomb about to Explode?

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Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

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However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

Central banks have been buying $2.4 billion in assets every hour for the past two months

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Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

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Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.