Nasdaq Remains Unaffected Despite Akamai (AKAM), Cisco (CSCO)

The tech-heavy Nasdaq managed to squeak out a small 1 point gain after large bell-weather tech stocks Cisco (NASDAQ: CSCO) and Akamai (NASDAQ: AKAM) disappointed investors. Cisco was down over 14% on another quarterly miss. The company has already missed three quarterly earnings targets in a row, and is likely losing business to smaller, more agile networking companies. Akamai (NASDAQ: AKAM) beat earnings and revenue (see details here), yet guidance disappointed investors sending the stock crashing over 15%. Despite these top notch tech companies falling, the Nasdaq held strong and continued to rally and the technology sector as a whole remains vastly undervalued due to its rapid growth.

Top Traded Stocks of the Day: CSCO, C, SPY, BAC, F

The stock with the highest trading volume of the day was Cisco (NASDAQ: CSCO) with 553 million shares traded. Cisco took a large 16% hit today as investors were unimpressed with the poor results from the quarterly report. Citigroup (NYSE: C) usually the top traded stock of the day came in second today with 381 million shares traded. The SPDR S&P 500 ETF (NYSE: SPY) was next followed by Bank of America (NYSE: BAC) and Ford Motor Corp (NYSE: F). Each stock had 158 million, 130 million, and 94 million shares traded respectively.

Back to Back Double Digit Drops for CISCO (NASDAQ: CSCO)

NEW YORK - One would think Cisco traded on the AMEX, or was a low level Nasdaq company after its stock price drop following its last two quarters instead of the lofty Dow Jones Industrial Average. Today CISCO plunged 16% which was a little worse then the 10% drop in their last quarter. Cisco said revenues were $10.75 billion and net income came in at $1.9 billion.

The company has not shown solid revenue or earnings growth over the last few years but the stock is not valued like a Netflix, or an Amazon and isn't a pharmaceutical company that just had its just had its drug rejected by the FDA. Investors should know by now what to expect from Cisco. It is pretty absurd to be seeing stable blue chip company's losing 16% of market value in a single day. It goes to show how the stock market is can act as a casino from time to time.

Surprise Cisco Sale

CEO of Cisco, John Chambers, surprised investors far and wide when news broke out that the networking giant’s boss had sold an outstanding 243,178 at an average price of $22.50 per share. That amounts to $5,471,505 in cash. The move may have angered long term value investors who were holding onto the stock, as selling usually shows signed of weakness and uncertainty. However, CEOs usually sell their own stock for various reasons including retirement, needing the money, and just as a safe move if they believe the market will take the stock lower.

“Chambers always pull through.” Said star analyst and co-CEO of The Markets Are Open, Andy “Raw” Kibbens. “Cisco is a clear buy. You don’t sell a networking company when the Internet is growing faster than anything. Cisco has been growing over 20% per year.”

Stockbreifings.com had this to say:
“If you’re contemplating investing in Cisco Systems (NASDAQ:CSCO) stocks, make sure you make the trade at the right price. Timing the market or technical analysis might often a difficult task, but do make sure you take into account the price history”
http://www.stockbriefings.com/cisco-systems-nasdaqcsco-chairman-sell-off/3171542

“Now is the time to buy Cisco,” Kibbens retorted. “It’s trading one point above its 52-week low, and they’re worried about timing? Just buy the darn stock.”

Cisco is currently trading at $22.23 and has a 52-week low of $20.93.

Cisco Duck

Cisco Systems reported net income of $1.9 billion or $0.33 cents per share for the fourth quarter. Net income came in 73.7% higher than the same quarter last year, and sales were 27% higher. Yet the stock got hammered today as these results missed analyst expectations and gave a hint of a slowdown for business at the networking giant. “Cisco has a good business model, but it’s not good enough in this environment,” said Andy “Raw” Kibbens, star analyst and co-CEO of The Markets Are Open. “There is more competition from the small networking companies, and believe me, they have an excess of growth.” The stock was down a whopping 10% as the earnings results disappointed and as analysts came in to turn the rubble into sawdust.

Analysts at BMO downgraded the stock from Outperform to Market Perform, lowering their price target to $23. An analyst at Oppenheimer cut the rating down by the same amount as BMO. Morgan Stanley gave Cisco an Equal-weight rating. “The downgrades are certainly inline,” Kibbens commented, “I’m not exactly sure was an Equal-weight rating is… I see at as a Hold of some sort. I say cut your Cisco position down to $0 and move into something better.” The company reported a mixed quarter and a weak future outlook for its business. “What do you expect?” Kibben remarked, “$0.33 cents per share is pocket change. Intel reports a beautiful $0.51 cents per share, trades lower than Cisco, and is expecting an even larger surplus of juicy profits next quarter. If you have any intelligence, switch to Intel,” he told reporters. Intel trades at approximately half the PE ratio of Cisco.