Buy Alert: December 21, 2012

Marcus Haber | December 21, 2012

Buy Alert: December 21, 2012

Trade Details

Buy Cisco Systems (CSCO) January 2013 $20 Calls for $0.45 or better

Why?

CSCO is reforming itself as a software and services company. The company has closed several acquisitions recently, including one this week of Meraki – a leader in cloud networking. Cisco also has a ton of cash and continues to find ways to grow despite the commoditized nature of its current products.

That being said, the stock’s down 2% today. What’s going on?

Actually, nothing – at least nothing specific to CSCO.

You see, the stock is a Dow Industrial component and its down on general market selling. The financial markets are pulling back on concerns over delays in the fiscal cliff talks.

However, once buyers come back into the mega-cap stocks, CSCO is sure to find a bid. Plus, Cisco calls are cheap. Let’s scoop up a few and try to capture some quick gains.