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After what has been a gruelling couple of years for one of the biggest of the Silicon Valley mega-tech stocks, it looks like Cisco Systems Inc. (NASDAQ: CSCO) has turned things around in a dramatic fashion. The company reported solid earnings for the quarter and raised the dividend paid to shareholders. A new research report from RBC makes the case that three stocks in the technology supply chain may see some positive benefit from the uptick at Cisco.
The three companies that RBC sees benefiting the most from the Cisco results and guidance are Amphenol Corp. (NYSE: APH), Celestica Inc. (NYSE: CLS) and Flextronics International Inc. (NASDAQ: FLEX).
About 4% of Amphenol’s sales are to Cisco. It is one of the world’s largest designers, manufacturers and marketers of electrical, electronic and fibre optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable.
With more than 10% of its total sales to Cisco via routers, Celestica provides supply chain solutions to equipment manufacturers and service providers in the communications, consumer, enterprise computing, industrial, aerospace and defense, health care, solar, green technology, semiconductor equipment and other end markets in the Americas, Asia and Europe. Flextronics is rated Outperform at RBC and looks to be a winner from the Cisco gains as this leading end-toend supply chain solutions company delivers design, engineering, manufacturing and logistics services to a range of industries and endmarkets, including data networking, telecom, enterprise computing and storage, industrial, capital equipment, appliances, automation, medical, automotive, aerospace and defense, energy, mobile, computing and other electronic product categories.
The growth and turnaround at Cisco over the past year is an overall positive for the industry. Investors looking to reap some ancillary benefits from the solid report may want to buy one of these stocks RBC sees as benefiting.