Earnings Season: Cisco Systems, Inc. (NASDAQ:CSCO)
It is earnings season once again and in honor of this highly anticipated event we will be profiling one stock each day that investors will we watching once the quarterly earnings results are released. With the highs we’ve reached to date, market reaction to these earnings results will be imperative to determine whether the uptrend will continue or if a correction is set to occur. Please join us over the next few weeks while we give you the information you need before the companies report.
The Stock
Cisco Systems, Inc. (NASDAQ:CSCO) is set to report earnings after the market close today. Analysts are expecting the technology titan to report earnings of 39 cents per share on revenues to $10.24 Billion. This would mark a considerable improvement over the year ago period of 30 cents per share and revenues of $8.16 Billion. The stock is currently up around 3% by midday.
The company currently has an analyst “buy” rating and investors are expecting good things from this company. As a result, institutions have been seen accumulating shares on net.
The stock has been in a long term uptrend since the March 2009 market bottom and has hit a point of resistance at $28 twice within the past 3 years before pulling back. This will remain the level that the stock will be required to overcome in order to move higher. Fundamentals detail a similar target of around $28.
The stock does not have a good history of trading higher after May Q3 releases looking at the past four years of data, trading negatively to losses averaging 7% in the 60 days following the report. Also to note, each of these quarters within the past four years had reported EPS that beat analysts estimates.
Chart Courtesy of StockCharts.com
The Clock
The seasonality of Cisco looking at the 20 year chart is mildly positive through the summer months, gaining almost 13% by September. The peak period of seasonal strength for this equity exists within the period of strength in the Technology sector from October to January for gains reaching 26%, on average, over the period.
| Cisco Systems, Inc. (CSCO) 25.96 | -0.17 (-0.65%) | ||||||||||||||||||||
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| Seasonality Analysis | |||||||||||||||||||||
| Analysis has revealed that with a buy date of October 10 and a sell date of January 11, investors have benefited from a total return of 194.89% over the last 10 years. This scenario has shown positive results in 6 of those periods. | |||||||||||||||||||||
| Conversely, the best return over the maximum number of positive periods reveals a buy date of October 26 and a sell date of November 7, producing a total return over the same 10-year range of 80.39% with positive results in 10 of those periods. | |||||||||||||||||||||
| The buy and hold return for the past 10 years was -55.3%. | |||||||||||||||||||||
| Technical Analysis | |||||||||||||||||||||
| Support 2 | Support 1 | Pivot Point | Resistance1 | Resistance2 | The Numbers | ||||||||||||||||
| 25.23 | 25.60 | 26.18 | 26.55 | 27.13 | Most Recent Close: | 25.96 | |||||||||||||||
| Support/Resistance Analys | Neutral | 52-Week High: | 27.74 | ||||||||||||||||||
| MACD Analysis: | Negative/Decreasing | 52-Week Low: | 17.61 | ||||||||||||||||||
| MACD vs. Signal: | Below/Thinning | Fib. Retracement: | ~ 78.6% | ||||||||||||||||||
| RSI Analysis: | Bearish | 50-Day MA: | 26.38 | ||||||||||||||||||
| Stochastic (Fast) Analysis: | Neutral | 200-Day MA: | 24.07 | ||||||||||||||||||
| 50 vs 200-Day MA Analysis: | 50-day Above 200-Day MA | High Critical Level: | 27.35 | ||||||||||||||||||
| Year over Year Trend: | Strongly Gaining | Low Critical Value: | 25.61 | ||||||||||||||||||
| Critical Level Analysis: | Within Critical Levels | Average Monthly Gain: | 3.2% | ||||||||||||||||||
| MFI Analysis | Below 50 Declining | Technical Rating: | 9 | ||||||||||||||||||
| Candlestick Analysis | Neutral/Indecision | On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels. | |||||||||||||||||||
| Situational Analysis | |||||||||||||||||||||
| Past Year | Advancing Sessions % | Return % | 10-Year Average | Advancing Sessions % | Return % | ||||||||||||||||
| May 11 thru Jun 10 | 52.4 | 7.2 | May 11 thru Jun 10 | 52.1 | 4.4 | ||||||||||||||||
| Best Return: 7.9% – Sell Jun 9 | Best Return: 8.8% – Sell May 30 | ||||||||||||||||||||
| May 11 thru Aug 9 | 54.8 | 19.2 | May 11 thru Aug 9 | 49.8 | 3.1 | ||||||||||||||||
| Best Return: 21.3% – Sell Aug 3 | Best Return: 14.2% – Sell Jun 28 | ||||||||||||||||||||
| May 11 thru Nov 7 | 53.2 | 28 | May 11 thru Nov 7 | 50.4 | 4.4 | ||||||||||||||||
| Best Return: 31% – Sell Oct 14 | Best Return: 20.2% – Sell Aug 10 | ||||||||||||||||||||
| Following Earnings Releases in General – Last 12 Periods | Following Q3 Earnings Releases – Last 4 Periods | ||||||||||||||||||||
| 12-Period Average | Advancing Sessions % | Return % | 4-Period Average | Advancing Sessions % | Return % | ||||||||||||||||
| After 30 Days | 47.4 | -1.4 | After 30 Days | 44 | -2.8 | ||||||||||||||||
| Best Return: 3.6% – After 18 Days on Average | Best Return: -0.5% – After 24 Days on Average | ||||||||||||||||||||
| After 60 Days | 49.9 | 0.1 | After 60 Days | 44.2 | -7 | ||||||||||||||||
| Best Return: 6.2% – After 36 Days on Average | Best Return: 0.9% – After 33 Days on Average | ||||||||||||||||||||
| After 90 Days | 51.3 | 0.5 | After 90 Days | 46 | -4.4 | ||||||||||||||||
| Best Return: 9.9% – After 61 Days on Average | Best Return: 5.7% – After 51 Days on Average | ||||||||||||||||||||
| Further Analysis | |||||||||||||||||||||
| Sector: | Technology | Industry: | Networking & Communication Devices | ||||||||||||||||||
| According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Technology Sector ranges from October 9th through to January 17th. The seasonality ends around the time of the Consumer Electronics Show at the beginning of January and before earnings are finished being reported for the previous quarter in which holiday sales contributes significantly to the bottom line. | |||||||||||||||||||||
| Current Consensus Recommend: | Outperform | ||||||||||||||||||||
| Recommendation 1-Month Ago: | Outperform | ||||||||||||||||||||
| Recommendation 3-Months Ago: | Outperform | ||||||||||||||||||||
| Disclaimer | |||||||||||||||||||||
| Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed. | |||||||||||||||||||||
| © 2010 EquityClock.com, member of the Tech Talk Financial Network | |||||||||||||||||||||
Stocks mentioned in this post: CSCO
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