<p>At the time of writing, global cases of coronavirus are approaching one million marks, with the United States leading the number of cases by one mile. Given this dubious honor, it is no surprise that the markets have taken down even stable companies such as Cisco Systems (NASDAQ: CSCO). But because of its long-term potential, many are taking advantage of the Cisco stock rebate.
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In my opinion, it is not an unreasonable investment. Basically, CSCO has a solid balance sheet. In addition, its three-year growth rate is above average for its industry, while having very strong profitability margins. Even better, Cisco shares give you a generous dividend, which can help mitigate the disadvantage while giving you passive income for your problems.
Still, investors should be wary of the evolving and harsh realities that come from a health crisis that turns into an economic one.
In shocking news, more than three million Americans applied for unemployment benefits over a one-week period. For the last reported week, economists estimate that we can see at least 3.5 million workers joining their ranks. According to USA Today, however, other sources have much higher forecasts:
… Nomura forecasts 4.1 million; Morgan Stanley, 4.5 million; and Bank of America, 5.5 million. Such claims for the first time on the unemployed constitute the best measure of redundancies throughout the country.
The numbers can only mark the first wave of a punishing couple of months.
“We could see unparalleled job losses in the April report in the tens of millions, with unemployment (now 50 years at 3.5%) reaching double digits,” Bank of America said in a research note.
No matter what, Cisco equities will face at least some turbulence in the future.
Organic Marketing for Cisco Stock
Despite the obvious headwinds – and many underestimated – CSCO shares have become increasingly convincing for opponents. I do not think it is only the discounted price that drives the interest. Rather, the underlying company has plenty of marketing opportunities. In addition, the management uses them.
Primarily, the pandemic is a chance for Cisco to market its broad portfolio of cyber security services. As you know, cybercriminals have come out in full force during this crisis. Prominently, many crooks have created fake websites to “sell” N95 face masks. Or in another bizarre example, conspiracy theorist Alex Jones released fake coronavirus cures before being shut down.
Of course, the biggest problem is that cybercriminals favor our country’s emotionally elevated state in order to cheat people out of their valuable assets. In this digital world, cash is not always the most desirable. Instead, unauthorized access to privileged information is often well worth its weight in gold.
Honestly, what better way to get that access than to manipulate someone’s feelings?
To this problem, millions of workers will work remotely. Although it is good for national health, it unfortunately creates a data goldmine for cybercriminals. To address this issue, Cisco offers its cybersecurity services for free for a limited time, especially for platforms involving remote employees.
At an early stage, this initiative is unlikely to benefit the Cisco stock. After all, the underlying company provides something for free. But in the long run, it is a perfect marketing opportunity to demonstrate the need for strong, reliable network defense mechanisms.
Without exception, cybercriminals will destroy companies with less, shall we say Cisco-smaller platforms. Thus, this is an easy compilation to sell corporate customers, which eventually increases the profile of the Cisco stock.
Advantages of a virtual normal
In an interview with CNBC, Cisco CEO Chuck Robbins produced interesting statistics about hope in long-distance conferences. Robbins stated:
During the first 11 working days in March, we had 5.5 billion meeting minutes … Yesterday we held 3.2 million meetings globally on Webex, and that does not include one to one. There are several individual meetings.
In recent weeks, of course, interest in so-called work-from-home stocks – Slack Technologies (NYSE: WORK), Zoom Video Communications (NASDAQ: ZM) and Dynatrace (NYSE: DT) – has increased. We are currently in the low-hanging fruit phase of the sector’s demand; that is, only existing ones win.
But as we move forward, corporate customers will rate work platforms according to several criteria, including reliability, usability and security. Here, CSCO has a fantastic opportunity to market itself as a comprehensive solution for all communication needs.
Granted, it is not a perfect bet because we are hardly in a perfect environment. That said, if you are going to buy some discounted shares, the Cisco stock offers a very solid look.
Josh Enomoto, a former senior business analyst at Sony Electronics, has helped broker larger contracts with Fortune Global 500 companies. In recent years, he has delivered unique, critical insights for the investment markets, as well as for various other industries, including law, construction management and healthcare. At the time of writing, he had no position in any of the above-mentioned securities.