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Another up day... I wonder if they are already buying back shares on leftovers from a prior authorization. That would be smart as they could get them at a lower price before announcing a subsequent buyback authorization and shooting the price up. Hopefully the latter happens before the 19th but I am losing hope... only 8 more trading days. At current rate though, we may still make some money.
My plan is to sell 20% of my calls at 40 cents (10x) and then ride the rest.
After that, and if no buyback announcement is made, calls spanning the next earnings mtg in feb might be in order, if PPS is still sub 42. That would be a logical time to discuss the buyback to counter any negative earnings impacts of the repatriation tax payment. I believe they used that forum to announce a buyback in 2016.
Good luck
Price target raised from 37 to 46... good news... hopefully other analysts update their targets too
https://www.cnbc.com/2018/01/05/cisco-hits-highest-level-in-almost-17-years-after-bank-of-america-upgrade.html
Nice move up... still waiting on that buyback news
Entering ex dividend period on their quarterly dividend now
Next earnings call not til mid Feb
Quite a few positive articles about transition to new markets
Some articles questioning repat tax impact on near future earnings, but my understanding is companies can pay it over next 8 years rather than all at once
Two weeks and 2 bucks to go on my 41c , fingers crossed
NTAP has been a bit volatile lately, I sold another quarter of my 55c s today after an upswing...
Hope all is well
https://www.thestreet.com/story/14429667/1/what-the-tax-cuts-mean-for-apple-cisco-and-silicon-valley.html
Not sure on timing... or much else for that matter... buyback amount, etc. only subjective data at this point
Another buyback announcement that serves as possibly a better reference is Oracle. They announced 12B increase in buyback on 14 DEC.
Their market cap is similar to csco. They are in a related industry and have a similar p/e. They are up about 20 percent on the year, similar to CSCO. One difference is CSCO pays about a 2X higher dividend. Oracle has a higher price forecast in terms of percent increase relative to current PPS.
The oracle buyback announcement resulted in only minor price movement, which means it was effectively priced in during the rally.
So bottom line, I think we need a big buyback number from CSCO in order to get much movement upwards. I would guesstimate that the first 15B on whatever they might announce is mostly priced into the current PPS.
I'm hoping for at least 30B. Of course, they will have in the neighborhood of up to 60B repatriated, based on their overseas hoarder cash. So they could maybe even go higher.
All hopeful speculation on my part. Time will tell.
Ball is in CFO Kramer's court now. Congress and POTUS did their part, on schedule, amazingly.
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
Looks like Trump could sign tax bill tomorrow...
https://www.cnbc.com/2017/12/21/senate-has-enough-votes-to-pass-spending-bill-sets-stage-for-tax-cut-signing.html
Nice action today relative to market, but this might hurt any December calls... https://www.bloomberg.com/news/articles/2017-12-20/trump-is-said-to-plan-tax-signing-jan-3-due-to-technical-issue
Trump may not sign until 3 Jan... ugh
I've also seen a few dud buyback announcements this last week.... PFE and PPG. PFE stock price decreased when they upped their buyback plan by about 5 percent of market cap... I assume the market had higher expectations. PPG went up a little with a buyback plan for about 10 percent of market cap.
It looks like the market has priced in some of the buyback potential. I hint both of those companies are rated much less favorably than Cisco, so they may not be good reference points.
CSCO CFO in Nov on tax reform impact "What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term. "
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
I bought the NTAP calls around the same time as initial batch of csco calls because they also have a high ratio of overseas cash to market cap... similar to csco at that time. but it has surged already because of better than expected earnings
Unfortunately, I only bought 40 calls because I could not find anything on their plans for repatriation and thought it was riskier (and getting in now may be more so). I'm still holding 20, hoping it will surge again.
On a somewhat different note, I studied Walmart's buyout announcement in oct 2017. They announced a 20 Billion usd buyback over 2 yrs. Their stock surged 7 or 8 percent in a few days.
http://www.businessinsider.com/walmart-stock-price-20-billion-buyback-announcement-2017-10
Their market cap was a bit bigger than csco' I think they were around 240 billion at the time. Csco' s market cap now is about 190 Bil.
So best case if CSCO announced that they would put all their 70 bil overseas cash (maybe 60 Bil after 15 percent repatriation tax bill), I would expect a 20 to 30 percent surge in a short period of time, if the market responded similarly to the walmart announcement.
Variables of course include tax plan passing finish line, date of any potential buyback announcement, planned buyback amount, market cap at time of announcement, and market response.
Time will tell.
http://247wallst.com/investing/2017/12/16/20-fresh-stock-buybacks-could-send-100-billion-back-to-shareholders/
Background info on surging buybacks... no mention of csco but some interesting info
And of course there are still two votes and a signature that need to happen in DC first! News seems encouraging there.
Yes, the highly leveraged 41c for Jan seem like they have barely moved in price despite the stock cracking 38 already
I bought more of them and some for end of December using a portion of my profits from some ntap calls that are up 5500 percent.
The Cisco play is certainly not without risk.
An announcement on a buyback next week sure would be a nice Christmas present.
Hopefully it will move with the broader market anyway and get us close so we can at least ride freebies.
Good luck to you.
http://social.fool.com/blog/43286436964 2 tech stocks are ridiculously cheap
Maybe some clues in the recent shareholder meeting transcript... nothing concrete but there was mention at one point of policy to return half of cash flow to investors, as well as the fact that csco has been lobbying for over a decade to ease the repatriation tax rate. CEO also said hoping to see something in a few weeks when asked about tax reform. I thought that was weird given that tax reform could be signed as early as next Wednesday... perhaps he was hinting at an announcement by Cisco... just speculation on my part.
Splitting profit over the new year could be advantageous from a tax perspective for investors.
My hope is they announce a buyback before end of CY... they,ve certainly been anticipating repatriation for a long time.
Hopefully they throw more than 50 percent of the overseas cash into the buyback, or include a dividend too. Even 50 percent of 70 billion is a big buyback though, given that market cap is 190B.
A guy can hope. I bought some calls for mid Jan.
Sorry I forgot to post the link I was commenting on/responding to which features msft and aapl and downplays csco... the ratio of overseas cash to market cap is what I think is key, which is often overlooked
http://marketrealist.com/2017/12/tax-reform-a-christmas-gift-for-microsoft-and-apple/
CSCO is the better short term tax reform play and here is why...
1. They have the largest pile of overseas cash (relative to the size of their market cap). Their overseas cash pile is equal to about 34 percent of their market cap... that is huge!!! Tax reform will allow repatriation of that cash at a low tax rate.
2. They are on the record stating that they will use repatriated cash to get much more aggressive with their share buyback program. If they use only half of the repatriated cash for buybacks, the stock could possibly go up 15 percent
More info below
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
CSCO is the better short term tax reform play and here is why...
1. They have the largest pile of overseas cash (relative to the size of their market cap). Their overseas cash pile is equal to about 34 percent of their market cap... that is huge!!! Tax reform will allow repatriation of that cash at a low tax rate.
2. They are on the record stating that they will use repatriated cash to get much more aggressive with their share buyback program. If they use only half of the repatriated cash for buybacks, the stock could possibly go up 15 percent
More info below
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
CSCO is the better short term tax reform play and here is why...
1. They have the largest pile of overseas cash (relative to the size of their market cap). Their overseas cash pile is equal to about 34 percent of their market cap... that is huge!!! Tax reform will allow repatriation of that cash at a low tax rate.
2. They are on the record stating that they will use repatriated cash to get much more aggressive with their share buyback program. If they use only half of the repatriated cash for buybacks, the stock could possibly go up 15 percent
More info below
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
CSCO planning aggressive buyback if tax reform passes
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
Playing calls on this one before the top blows off
CSCO planning aggressive buyback if tax reform passes
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
CSCO planning aggressive buyback if tax reform passes
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
Tax reform could come before 2018, and here are the two names you want to buy: Strategist
https://www.cnbc.com/2017/11/18/tax-reform-could-come-before-2018-and-here-are-the-two-names-you-want-to-buy-strategist.html
I'm expecting a better week for CSCO with the tax reform approved in senate.
Congress might even come to agreement sooner than planned if dems threaten shutdown on Fri... or they could delay it. You never know.
My current Jan 19 2018 call strikes are NTAP at 55 (already in money) and CSCO at 41 (still a long way to go). I'm hoping both will be way beyond those strike prices by then, but that may require both signing of tax reform bill and buyback announcements/confirmation.
Here is an interesting article I found recently about Cisco's plans and speculates how vested they are in this tax reform process to return those overseas funds to shareholders...
https://theintercept.com/2017/10/11/tax-plan-trump-chamber-of-commerce-small-business-lobby-cisco/
We'll see how it goes. Have a good week all.
Agreed, and thanks for updated analysis. Hopefully with senate moving forward on tax reform, that will catalyze the bulls
I also read last week that there was some insider selling on Tues which triggered some market selling Wed
Probably just folks taking some profits given uncertainty of tax reform until last night
I think next week will be huge for Cisco and many others... we'll see if the repatriation plans give cisco some extra momo.
Enjoy the rest of the weekend.
Tax reform real stock play
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
CSCO planning aggressive buyback if tax reform passes
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
CSCO planning aggressive buyback if tax reform passes
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
CSCO got beat down by Forbes fin analysis today, but they are forgetting about tax reform... or conveniently shifting focus ... but the call sellers and shorts are going to be hurting bad come Jan, in my opinion
The real story is here:
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
Sure Trader - Start Trading Stocks & Options with only $500
CSCO got beat down by Forbes fin analysis today, but they are forgetting about tax reform... or conveniently shifting focus ... but the call sellers and shorts are going to be hurting bad come Jan, in my opinion
The real story is here:
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
Sure Trader - Start Trading Stocks & Options with only $500
CSCO got beat down by Forbes fin analysis today, but they are forgetting about tax reform... or conveniently shifting focus ... but the call sellers and shorts are going to be hurting bad come Jan, in my opinion
The real story is here:
https://www.bloomberg.com/news/articles/2017-11-29/trump-s-tax-promises-undercut-by-ceo-plans-to-reward-investors
Background on companies with high tax reform repatriation potential
https://www.cnbc.com/2017/09/26/goldman-these-companies-are-headed-for-a-big-tax-break-on-overseas-cash.html
Related info from Cisco earnings call on 15 Nov 2017
James Faucette -- Morgan Stanley -- Analyst
Thanks very much. I wanted to ask a question on capital structure. Can you give us an idea of what your preferences and priorities will be in capital structure in terms of buybacks and acquisitions, etc. if the proposed new tax changes pass versus if that change in tax law gets derailed? I'm particularly curious as to how you're thinking about the pacing of acquisitions versus buybacks, etc.
Thank you.
Kelly Kramer -- Chief Financial Officer
I'll take that one. What I'd say is in terms of acquisitions, the tax policy isn't impacting us either way because we are lucky to have a great cash flow and access to capital. So, it hasn't been stopping us from anything from an acquisition perspective and it won't. So, that will continue.
I would say we're definitely encouraged by the progress that's going on, on the tax reform. So, like we said in the past, when that happens and if we get a repatriation which both plans currently have, we're going to continue like we have, growing or dividend with our earnings growth and where we have opportunity is really to get much more aggressive than we have been on the share buyback and of course we want to make sure we continue to have enough firepower to continue to be able to do the right acquisitions to help position Cisco right for the long term.
https://www.fool.com/earnings/call-transcripts/2017/11/16/cisco-systems-csco-q1-2018-earnings-conference-cal.aspx
Buying June calls on ABX as market insurance
NTAP calls @ 55.00 now up 4000 percent in two weeks... wish I would have bought more than 40... that one is a tax reform repatriation play that is already in the money due to earnings and strong buy status
High leverage CSCO calls @ 41.00 stagnant despite good earnings report... looks like it will be tax reform or bust for those
Happy Thanksgiving
And in case tax reform fails and the market tanks, I bought some ABX calls for June. It's an unpredictable world right now.
Thanks. I think Cisco is 90 percent a tax reform play due to repatriation potential. I bought 350 option calls for Jan for under a grand. For every dollar it goes above 41, I could make 35K. High risk high reward. If tax reform stalls, I'll be lucky to get my csco call investment back, though the strong earnings report helped.
For the same reason, I bought highly leveraged calls on NTAP two weeks ago that are already in the money because of their earnings report. I would not chase that one either, but I think it will also go boom again if tax reform goes through.
I'm not advocating tax reform, but GS had odds at 80 percent last I checked. I have already cashed out 30 percent of the NTAP investment which has been 4x my call buys for both stocks. I recognize this was lucky and not a normal outcome for this strategy.
Happy Thanksgiving, and thanks for your insightful analyses on csco.
https://www.cnbc.com/2017/11/18/tax-reform-could-come-before-2018-and-here-are-the-two-names-you-want-to-buy-strategist.html
With appropriate leverage, I.e. call option, potential 10 bagger or more
I am in on cisco because their overseas holdings are 37 percent of their market cap and their cfo mentioned aggressive buybacks as plan for repatriated funds
Pending tax reform of course
Good looking out
the way I see it, if they repatriate their $70B and then announce that they plan to use $40B to buy back shares, the o/s count goes down by ratio similar to the buyback amount over market cap. $40B is about 25% of the market cap. So I expect/hope the stock will go up by 20% or more if p/e held constant.
Combine that with the momo of tax cuts, the savings on the repatriation tax rate... could be looking more like 1999 :D
One can hope, right?
Disclaimer: I am not a trader and there could be incorrect assumptions and flaws in this logic, plus it is dependent on most of congress agreeing on something;D
From that article I posted yesterday...
"[CFO] Kramer said that Cisco, which is one of the richest companies in the technology industry with about $71.6 billion in cash, believes that the proposed tax changes in the U.S. would help the company.
If tax legislation passes, “we’ll be able to get much more aggressive on the share buyback” and the company would have more flexibility for spending on acquisitions, she said."
https://www.bloomberg.com/news/articles/2017-11-15/cisco-sees-first-revenue-growth-in-eight-quarters-shares-jump
.