Deal and No Deal

 | Feb 13, 2014 | 12:18 PM EST
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Why not buy Comcast (CMCSA) and PepsiCo (PEP)? One's going down because of a deal and the other one's going down because there is no deal and that's a little ridiculous. And why not sell Cisco (CSCO), which is only trading at its current levels because it has some yield. It is hardly a value stock. (See Herb Greenberg for more on Cisco.)

I work for Comcast, so take what I say with a grain of salt, but if the company can get Time Warner (TWC), it can turn around that ne'er-do-well cable outfit in a year and get it to grow instead of shrink. The deal is being paid with stock, so there are no leverage issues. I am confident that the deal will pass muster because there is no overlap and because I don't think the "market power" argument over the broadcast and cable networks will hold water in Washington.

In the meantime, Comcast is a cash flow machine that hasn't been down in ages. It's a buy.

I am shocked that anyone actually believed that PepsiCo was going to split itself up. That has never been in the cards and the 7% growth the company gave you, plus the increased buyback and dividends, makes this stock a terrific opportunity.

The business is strong and the snacks end of the equation makes the tough slogging in domestic carbonated beverages go down pretty easily. It's a buy.

Now, with Cisco, I am always amazed by the sycophants in the analyst community and how they stick by this once great company. Its numbers are lousy, it is losing share to Alcatel Lucent (ALU) and Juniper (JNPR) and it has horrendous leadership. How often can we take disappointment like this? I think the answer is that as long as John Chambers remains CEO, we are going to see these numbers.

Random musings: We think trucks are on the way back and are happy with our Cummins (CMI) position. Disney (DIS) and CBS (CBS) are doing fabulously and the latter is still not overextended. Facebook (FB) and Google (GOOG) are posting very good numbers and the stocks can go higher; the latter one is the largest position in our Action Alerts PLUS charitable trust.

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