Cisco (NASDAQ:CSCO) is making another bolt-on move, a strategy which the networking giant has pursued for quite a while now. The deal is too small to read much into the share price reaction, but Cisco's dealmaking strategy yet has to pay off, as organic sales are probably falling by mid-single digits at this point in time.
The fall in sales is worrying, but is compensated by a high earnings yield and very strong balance sheet, a compelling dividend and prospects for stabilisation. That makes Cisco a decent earnings play, but it still could turn out to become a value trap to some minor extent. After all, organic sales are falling by a few points per year, as sales are flat in recent years despite multi-billion M&A efforts in what is generally a good economic environment.
As such, I am not actually buying the tax repatriation holiday-induced rally, as I stick with an entry point around the $30 mark.
