Tweedy Browne’s Top Stocks (Part I): Johnson & Johnson (JNJ), Cisco Systems, Inc. (CSCO)

As of December 2012, Tweedy Browne held more than 10 million shares of Cisco, with a total value of nearly $200 million, accounting for 5.8% of its total portfolio. With a trading price of $20.90 per share, Cisco is worth nearly $111.4 billion on the market. The market is valuing Cisco at only 6 times EV/EBITDA. HP is trading at nearly $19.80 per share, with a total market cap of $38.6 billion. HP is valued at nearly 3.8 times EV/EBITDA. In late 2012, HP was hit quite hard, as it had to write down one of its biggest acquisitions, Autonomy, with around $8.8 billion in charges. After the write-down, HP remained quite a risky stock for investors, as it still had around $35.5 billion in goodwill and intangible assets that was quite vulnerable to future impairment.

Foolish Bottom Line

With the consistent operating performance, leading market positions and reasonable valuations, I personally think both Johnson & Johnson and Cisco are excellent stocks to hold for long-term investors.

The article Tweedy Browne’s Top Stocks (Part I) originally appeared on Fool.com and is written by Anh HOANG.

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