Option Trade 
Cisco Systems, Inc. (NASDAQ:CSCO) Calls
Tuesday, 17th May, 2016

** OPTION TRADE: Buy the CSCO Oct 2016 28.000 call at approximately $1.00. Place a pre-determined sell at $2.00.

Note: No protective stop losses added -- but if you wish to do so make it $0.40.

by Ian Harvey

May 17, 2016

Cisco Systems, Inc. (NASDAQ: CSCO), a network and communication provider, is expected to post Q3:2016 earnings today, Tuesday, May 18, after market close. Analysts expect the multinational technology company to post EPS of $0.55, and revenue of $11.97 billion. In the same quarter of the previous year, Cisco posted revenue of $12.1 billion which was a 5% increase y/y, and EPS of $0.47.

Though Cisco shares dropped over 3% on weakness in enterprise firms, analysts remain bullish on the premise that the company will be able to offset slowdown by growth in security software, specifically, its SourceFire products.

Additionally, CSCO’s Meraki WiFi, is significantly improving company shares. Lately, Meraki WiFi has been selling more software products and generating steady revenue for the company. These factors allow Cisco to be shielded from macro economic slowdown and declining enterprise spending on hardware.

The company has a 50-day moving average of $27.73 and a 200 day moving average of $26.76. Cisco Systems has a one year low of $22.46 and a one year high of $29.90. The firm has a market cap of $133.50 billion and a PE ratio of 13.13.

Cisco is profiting from three of technology's fastest growing trends, cyber security, data analytics and IoT.

Further, the shares should benefit from a strong dividend yield of about 4 percent, and cash flow generation (more than 60 billion in cash/short term investments).

Contributing to bullish outlooks, Drexel Hamilton analyst Brian White reiterated a Buy rating on CSCO on May 13, 2016 with a price target of $34.00. White explained his optimistic expectations are due to Cisco’s above-par product and company implementation, noting, “We expect Cisco’s strong execution and product cycle to provide a buffer in a soft spending environment (especially in the enterprise market).”

As well, Cisco Systems, Inc.‘s stock had its “buy” rating restated by equities researchers at Citigroup Inc. in a research report issued to clients and investors last Friday. They presently have a $30.00 price target on the network equipment provider’s stock. Citigroup Inc.’s target price indicates a potential upside of 13.08% from the company’s current price.

Two analysts have rated the stock with a sell rating, nine have given a hold rating and twenty-seven have given a buy rating to the company. Cisco Systems presently has a consensus rating of “Buy” and an average target price of $30.69.

Harvey’s Options Volatility Indicator

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

** OPTION TRADE: Buy the CSCO Oct 2016 28.000 call at approximately $1.00. Place a pre-determined sell at $2.00.

Note: No protective stop losses added -- but if you wish to do so make it $0.40.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



Back to Stock Options Made Easy Home Page

Back to Option Trades from Option Trade – Cisco Systems, Inc. (NASDAQ:CSCO) Calls - Tuesday, 17th May, 2016



Get all the latest options news from
STOCK OPTIONS MADE EASY with our FREE newsletter


Enter Your Email Address

Enter Your First Name









Search Stock Options
Made Easy



Enjoy Relaxed or Fast-Paced Trading? Choose your Membership Style...

Whether you prefer to take a laid-back approach to your trading,

or to charge ahead in your options trading,

 Stock Options Made Easy Armchair Trader and Cut-to-the-Chase Trader Memberships put everything you need to succeed at your fingertips for just  $39 or $79 per month.






Subscribe to our FREE
newsletter for all the latest options news!


Enter Your Email Address

Enter Your First Name











Follow S_O_M_E on Twitter