Cisco headquarters in San Jose, California | Prayitno
Summary
- 2020 has been a dreadful year for Cisco stock, as it has fallen by almost a quarter.
- A drop in demand and Zoom’s explosive rise have brought a wave of pessimism to the share price.
- However, given Cisco’s excellent market position, margins and dividend, I’m not writing it off just yet.
With stock prices receding left and right, opportunities for investment are revealing themselves. One stock that has plunged in recent months is Dow Jones component Cisco (CSCO).
The networking giant is down over 24% year to date and has been on a steady fall since August. With a current dividend yield of 4% and a cheap valuation, this internet titan grabbed my attention.
However, large, established companies that trade at a low valuation are not to be handled lightly. Is CSCO’s drop in price due to the short attention span of Mr. Market, or do we have a value trap on our hands?
