Tomahawk, WI 01/15/2014 (BasicsMedia) –  Cisco Systems, Inc. (NASDAQ:CSCO) is the leading provider of telecoms equipment. Its market dominance is being contested in recent times and this has impacted the company’s revenue. It was no wonder that the management sent out warning shots that the current quarter will see revenue fall between 8-10 percent.

But even in the eye of the storm, Cisco has not been a big disappointment. The stock has made money for many trades. During the first eight months of 2013, the stock was up more than 29 percent. It later bulled back and concluded the year with a gain of 11 percent. The stock is up about 1 percent year to-date.

Potential upward trend

That Cisco Systems, Inc. (NASDAQ:CSCO) reported it would suffer revenue decline in the current quarter sent shocks down the spine of investors, who in turn sold the stock in panic, thus resulting in big value loss. But I think there are a lot opportunities which investors seem to overlook in this stock.

First, the fall of the stock was fueled by the unpopular declaration by the management that revenue will be poor in this quarter. However, things don’t look as gloomy as many people may have thought. This being the case, the fall that has happened already should be short-lived given that growth potential exceeds any distraction to the stock.

As the company expands its reach in emerging markets, curb expenses and return more money to investors, the stock should rise in the long-terms and here lies the juice for long-term investors. The juice is that you can take the stock now that it is undervalued and wait to benefit from the impending growth.

Money to investors

Cisco Systems, Inc. (NASDAQ:CSCO) is now in perfect condition to reward investors. The company’s free cash is impressive at $11.73 billion as of the close of 2013. This suggests more than 13 percent increase in free cash flow from the same duration last year. As if that is not enough, over the past two years, the company’s fee cash has increased more than 31 percent. This year-over-year free cash flow scenario is impressive in several ways for investors.

It means that the company can afford to raise dividend which will benefit investors. The company is reported to be considering raising its dividend payout ratio from the current 30 percent to 50 percent as free cash increase. This dividend hike alone makes it a perfect move to invest in this stock now before the stock gets expensive as it should in the near-term.

Besides raising dividend payout ratio, Cisco Systems, Inc. (NASDAQ:CSCO)’s increasing free cash flow also allows for increase in stock buyback. The company has been buying back shares but the budget allocation for this program will be going up in the huge free cash flow environment.

Debt position

Investors are often concerned about the debt management risks levels of companies they invest in. If this is a concern, it is nice to note that Cisco Systems, Inc. (NASDAQ:CSCO) is fast eliminating its debts. The company’s debt now stands at about $12.9 billion, having come down from about $16.2 billion in just 12 months.

Bottom line

Nothing more can be said Cisco Systems, Inc. (NASDAQ:CSCO) other than the profit potential that it presents. As said earlier, this stock is going to rise sharply due to its strong fundamentals. It thus goes without saying that it is a wise investment move to get the stock now when it is discounted.

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