Buy A Stock Essay

998 Words4 Pages

What is one stock or bond you would buy and why? (500 words)

The stock I would purchase would be Cisco Systems (NASDAQ: CSCO), the leading provider of enterprise networking hardware, at $40.82 per share down from $49.93 pre-COVID-19 (about 18% decrease).

Cisco provides IT products across five industries: Networking, Security, Collaboration, Data Center, and Internet of Things (IoT). Essentially, Cisco is the backbone of the internet through its products. Despite revenue falls in Q4 and expected falls in Q1, Cisco is taking the measures to position themselves at the heart of the next industrial revolution. Recent commitments include reducing costs by $1 billion and by spending $6 billion on R&D a year. Additionally, they will return value …show more content…

Despite having slow growth in 2020, estimates have IoT growing in double digits in 2021. Cisco’s software dominates the sectors of device management and high-level security for IoT devices--an increasing concern for the energy, transportation, and manufacturing industries. These components position Cisco to be a leader in the development of smart cities with 101 in progress. Estimates have smart cities bringing in $2.3 trillion in revenue by 2024. Additionally, as cyber-attacks become more common, governments seek to build their seperate internet infrastructures--increasing the demand for Cisco’s products and unique country partnerships.

Cisco’s commitment to ESG principles reduces potential financial risk from public policy. Cisco ranks in the 97th percentile with a 12.1 risk score out of 100 and a strong rating in management of ESG issues. Cisco’s 2019 Social Responsibility Report indicated that from FY12 to FY20, they have achieved their goal of avoiding emitting 1 million-metric tonnes of greenhouse gasses in their supply chain by 115%. Logically, this was a strategic move because California has introduced carbon taxes towards companies (Cisco operates supply chain in San Jose).

Overall, Cisco is a great stock to purchase now with their response to revenue loss, M&A strategy, footing in the IoT, and their commitment to ESG principles for growth.

What is one industry you think will outperform …show more content…

Estimates show that wind speeds are 70% greater offshore than onshore. Logically, this means more energy is produced per the same unit of time leading costs of offshore wind to have fallen by 75% since 2014-- making it increasingly attractive for investors. Even more promisingly, according to the American Wind Energy Association, the United States has the potential for 2,000 GW of energy because of its vast coasts, which is double our current energy consumption. In fact, in G20 countries offshore wind energy is becoming cheaper than fossil fuels. By 2026, it is expected the market size will become $21 billion. This coincides with the logic of the Kuznets Curve. Kuznets curve states that during modern economic growth, economic degradation gets worse but then reaches a point where the environment is improved with increased growth. The warranting is likely due to increased disposable income for green