CSCO – Cisco, Turning Around A Tankership Revisited

• Posted by DynamicHedge
• on March 11th, 2011

I warned about the CSCO earnings shuffle a few weeks ago.

Cisco has made a habit of missing earnings.  The CEO also has a penchant for drama and over-enunciating the headwinds associated with their business.  The combination of the two surely frustrates the analyst community to no end…

…As you can see, it took twenty-nine days of under-performance relative to its benchmark before it regained any footing and outperformed.

Here we are now, 20-trading-days post earnings gap and it looks like there are now some signs of life.  My skew indicator turned longer-term positive a week ago.

What does this mean?  It means that CSCO has stopped underperforming its benchmark and may be ready to stop falling like a stone when the market gains some traction.  Be careful, the large-cap tech trade is getting hyped recently from the CNBC crowd.  Everyone is citing global growth, pristine balance sheets, and great value in many names like CSCO, DELL, etc.  Don’t expect CSCO to turn on a dime.  When it does turn, it could be a tell that market leadership is rotating out of energy and into technology.

Cisco (CSCO) — Turning Around A Tanker Ship (Dynamic Hedge)

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