NEW YORK, Oct. 11 /PRNewswire/ -- Cisco Systems (CSCO: $22) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. CSCO carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.
"Cisco is the preeminent equipment supplier in the multi-billion enterprise network routing and switching arenas, dominating roughly 70% of the market," said Ari Bensinger, Telecommunications Equipment Equity Analyst at Standard & Poor's Equity Research. "With its over $40 billion in annual revenue, we believe the company has several competitive advantages over its smaller networking rivals, including its large scale, with some $5 billion in annual R&D spending that provides a new product development edge in a technological driven market, its extensive customer base, which is ripe for product upgrade and cross-selling opportunities, and its nearly $40 billion in cash, which allows for a myriad of strategic acquisitions."
Bensinger says that industry fundamentals are strong as service operators and businesses need to upgrade their networks to address a rapid increase in network bandwidth demand. He expects bandwidth usage rates to continue to rise for the foreseeable future amid increasing penetration of mobile broadband subscribers and higher speeds for fixed broadband through the deployment of fiber connections. He adds that digital video, which is a material occupier of bandwidth, is increasing exponentially due to the proliferation of social networking sites that create a flurry of user-generated video content, the emergence of new data-geared consumer devices, such as Apple's iPad, and increased adoption of video conferencing solutions."
To view a video of Mr. Bensinger discussing Cisco, paste the following link into your browser.
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S&P Global STARS Distribution
In North America
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services North America recommended 39.2% of issuers with buy recommendations, 52.5% with hold recommendations and 8.3% with sell recommendations.
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services Europe recommended 36.6% of issuers with buy recommendations, 43.2% with hold recommendations and 20.2% with sell recommendations.
As of September 30, 2010 research analysts at Standard & Poor's Equity Research Services Asia recommended 46.8% of issuers with buy recommendations, 44.4% with hold recommendations and 8.8% with sell recommendations.
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services globally recommended 39.5% of issuers with buy recommendations, 50.2% with hold recommendations and 10.3% with sell recommendations.
5-STARS (Strong Buy): Total return is expected to outperform the total return of a relevant benchmark, by a wide margin over the coming 12 months, with shares rising in price on an absolute basis.
4-STARS (Buy): Total return is expected to outperform the total return of a relevant benchmark over the coming 12 months, with shares rising in price on an absolute basis.
3-STARS (Hold): Total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis.
2-STARS (Sell): Total return is expected to underperform the total return of a relevant benchmark over the coming 12 months, and the share price is not anticipated to show a gain.
1-STARS (Strong Sell): Total return is expected to underperform the total return of a relevant benchmark by a wide margin over the coming 12 months, with shares falling in price on an absolute basis.
Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 Index, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe 350 Index and the S&P Asia 50 Index.
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