CISCO RIDES AGAIN

At the peak of tech fever in 2000, Cisco Systems (CSCO), the largest global provider of Web networking gear for transporting data, voice, and video, crested at 82 a share. After the bubble burst, Cisco stock drifted lower for almost a decade, to 13.62 this March. Now it's at 23.02, and some bulls believe the rebound will continue.

Investors shouldn't ignore Cisco's big role in "riding the wireless-data wave--the surging demand for more data and devices by users everywhere," says Karl Mills, who heads top-ranked Counterpoint Select Fund. Mills believes the number of electronic devices that feed on data will continue to grow. "We invest in companies that gain from this data wave, such as Cisco," he says, which supplies products such as routers and switching devices connecting and managing communications among local and wide-area computer networks. Cisco has also forayed into consumer markets.

Trading at 17 times the fiscal 2010 earnings estimate of $1.30 a share and holding $25 billion in cash net of debt, Cisco is an attractive long-term investment, says Mills, who values it at 30. Matthew Robison of Wedbush Morgan Securities says Cisco's new Net routers "could drive more rapid long-term growth." He has upgraded Cisco to outperform from neutral. For 2011, Robison sees Cisco earning $1.53 a share.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

Inside Wall Street is posted at businessweek.com/investor at 5 p.m. EST on Thursdays.