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This stock up 36% in 2021 is still a value play

Should I buy Cisco Systems shares after the current dip?

Cisco Systems Inc (NASDAQ: CSCO) gained 36% in the stock market this year, but Gilman Hill Asset Management’s Jenny Harrington says it is still an inexpensive stock.

Harrington explains why she likes Cisco Systems

According to Harrington, Cisco is likely to benefit greatly from return to office in 2022. Building on her thesis on CNBC’s “Halftime Report”, she said:

I think it’s still value tech. It is a direct beneficiary of return to office. As we do more and more Zooms and remote meetings that put a huge strain on networks, companies need to invest in the networks. So, this is a compounder in our portfolio, a very long-term holding.

Harrington expects Cisco to grow its earnings by up to 15% for the foreseeable future. Late last week, Morgan Stanley raised its price target on the stock to $61 a share that it has already hit today. The $257 billion company has a PE ratio of 22.64.

Hightower’s Link agrees Cisco is inexpensive

In a separate interview on CNBC’s “Squawk Box”, Hightower’s Stephanie Link also picked Cisco over the high flyers as it offered “growth at a reasonable price”.

I like Cisco because enterprise spend will recover. We’re also starting to hear about it from Broadcom, HPE, and Dell. Cisco has very good visibility. Its guidance is very conservative because it has supply constraints, but who doesn’t. So, at 17 times forward with a 2.5% dividend yield, I like it.

In its latest reported quarter, Cisco noted a 33% annualised growth in product orders as enterprise, commercial, and cloud segments jumped 30%, 46%, and 200%, respectively. Link expects price increases to be a tailwind for Cisco in 2022.

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