- Cisco shares have not performed well so far YTD in 2020, but there doesn’t seem to be any long-term issues with this company.
- Most of the decline in sales/earnings for 2020 are due to cyclical downturn in infrastructure spend and COVID-19 impacts.
- Financially speaking, the company is pristine, still has a massive networking infrastructure moat and growth products/services.
- I expect Cisco to return to steady growth as cyclical headwinds ease up, and COVID-19 impacts and uncertainties go away.
Introduction And Investment Thesis
Cisco (NASDAQ:CSCO) has not performed well so far in 2020, as it has underperformed the S&P 500 by over 20% so far this year. This can easily be seen from the chart below:
I think the performance is unwarranted, though, as nothing has significantly disrupted Cisco’s businesses. I will explain in this article why now may be a good time to invest in Cisco for long-term investors.
Company Background
Before discussing Cisco as a compelling long-term investment, I wanted to write a brief synopsis of Cisco’s main businesses.
Cisco’s bread and butter is their products business, specifically their infrastructure business which mostly consists of sales of devices that are the backbone of the internet and networking such as switching, routing, wireless and database devices.
