Consider These Big Buys by Todd-Veredus Asset Management: Cisco Systems, Inc. (CSCO) and More

Todd-Veredus Asset Management (TVAM) is an investment adviser based in Louisville, Kentucky with $3.060 billion worth of assets under management as of Dec. 31, 2012. TVAM’s investment strategy hinges on price to intrinsic value being the most effective way to determine a stock’s true valuation. Its growth investment philosophy is to go for investments that have positive earnings surprises or estimate revisions. Let us look at this huge manager’s big buys for some ideas on a possible mix of stocks that we can consider.  These are Cisco Systems, Inc. (NASDAQ:CSCO), Citigroup Inc. (NYSE:C), Bank of America Corp (NYSE:BAC), Abbott Laboratories (NYSE:ABT), and Intel Corporation (NASDAQ:INTC).

Sources: whalewisdom.com, finviz.com, and nasdaq.com, as of Feb. 11, 2013

Cisco Systems, Inc. (NASDAQ:CSCO)

Todd Veredus initiated a new $22.356-million stake in Cisco in the fourth quarter, and I can clearly see why: Cisco is an exceedingly attractive stock. It has been exceeding expectations in terms of earnings for the last 4 consecutive quarters. It has become a dividend stock to beat in the industry; since the company decided to pay quarterly dividends in 2011, the amount has been increasing continually. In 2011, the annualized payment was only 18 cents; it nearly tripled in 2012 to 50 cents. Cisco is sitting on a huge amount of cash that can make any dividend income-seeking investor happy. Its payout ratio out of this cash is a very sustainable 13 percent. The company lures investors in with its high profitability. With these, a consistent positive revenue growth coupled with strong financial position, and a healthy P/E ratio of 13.65, Cisco indeed has earned its spot among the most favored stocks.

Citigroup Inc. (NYSE:C)

The fund manager bought an additional 579,399 shares of Citigroup, bringing the stake to 0.76 percent of its portfolio. The stock price is going upwards quite robustly, thanks to its good growth prospects for the years ahead and the new plans it has set for cutting costs. It should be noted that Citigroup has failed to meet the consensus estimates in the latest quarter because it has been experiencing negative growth in its revenue. However, its valuation is pretty healthy as the P/E ratio is 17.14 and PEG is 1.36. Also, it is becoming less reliant on debt to finance its operations, which is an added plus. Since Citigroup is well situated within international markets and has a double-digit profit margin (ttm), I believe its growth prospects are huge.

Bank of America Corp (NYSE:BAC)

Todd Veredus initiated a $24.877-million position in Bank of America in the fourth quarter. The stock price is also rallying quite fast. Its recent success in exceeding the consensus estimates in terms of earnings has brought positivity to this company. Potential investors should remember, though, that the bank has been suffering from negative revenue growth recently with its profit margin found at the bottom of its competitors. Meanwhile, Bank of America is able to sustain its dividend payment of 1 cent per share since the company clearly has a bulk of cash, enough to cover this and perhaps more if it decides to increase the payment. Although I believe that BofA can develop momentum soon, I need a little more pushing to get as excited as Todd Veredus has been.