SNAFU- CSCO market reaction; CTXS AMZN

November 14, 2013

 

After careful consideration, it did seem to me that SNAFU was slightly better than FUBAR (both acronyms by the way, not abbreviations, NSA, for example, is an abbreviation, NASA is an acronym) to describe what's going in the market today
- Major market indices are flat, including the NAS, in response to CSCO instead focusing on which side of the bed Ms Yellin woke up on this AM
- 3 downgrades out of 25 buy recs on CSCO, and one of those is GS's laughable Conviction Buy to Buy (nearly as laughable as taking QCOM to $70 a few days after a big miss and guide down) with the majority of the activity focused on cutting price targets
- As I was ready to predict but didnt dare say, FNSR, which may count CSCO as a 15% customer at most, is nearly down more than CSCO on the CSCO miss- we are expecting the company to consolidate its recent run of sequential growth in flat to up guidance which is fine at these levels
- CTXS down about as much in the last two days as CSCO is on the worse quarter they have ever reported, on the launch of a competitive clould based VDI product by AMZN yesterday- CTXS presented at RBC yesterday and directly addressed the issue, noting that it competes with a small portion of their cloud VID biz- we are size buyers of CTXS on weakness which we recently upped to long 3
-AMZN is apparently up on this same dynamic, despite recent data from ECOM showing sequential deceleration of AMZN ecommerce sales and poor data out of WMT this AM