Topic: How To Invest

What is Pat’s commentary for the week of October 24, 2023

Article Excerpt

Since its founding in 1984, Cisco Systems—a leading maker of computer networking equipment—has completed a whopping 245 acquisitions. While companies that rely on acquisitions for growth make us wary, Cisco has a strong history of profitably absorbing new businesses. The company recently announced the biggest takeover in its history—a $28-billion deal for cybersecurity software maker Splunk. The purchase is part of a new strategy by Cisco CEO Chuck Robbins to cut the company’s reliance on selling computer routers and other lower-cost generic hardware. The latter is where Cisco increasingly faces strong competition. We feel the addition of Splunk as well as the decision to sell security software as a subscription will spur Cisco’s growth for years to come. The continuation of remote work across North America and the need for trusted partners as businesses adapt to technological change should also spur Cisco’s growth. I asked our Successful Investor research department to draw up this Inner Circle Spotlight report on Cisco Systems. It outlines…