Q. Please give me your opinion of the stock of Cisco Systems Inc. I am a shareholder. — PG, via the Internet.

A. The world's leading supplier of data networking equipment and software has been playing "let's make a deal" this year.

It helped that it was loaded with cash as it entered the recession.

The company paid $2.9 billion for Starent Networks to obtain that firm's hardware and software for broadband wireless devices and another $44 million for the set-top box business of DVN Holdings of Hong Kong to gain a foothold in the Chinese cable market.

It spent $183 million to buy ScanSafe Inc., whose products filter web pages for malicious hardware as an online security measure, and $105 million to buy Tidal Software, whose command-and-control software is used in virtualised computing. It has also made a bid for Tandberg ASA, a maker of video-conferencing equipment.

Cisco CEO John Chambers has said he sees the beginning of a technology recovery and will be looking to hire more workers as business picks up and the firm aims to gain market share.

Boosted by those aggressive moves and the cautiously upbeat outlook, shares of Cisco Systems are up 47 percent this year following last year's 40 percent decline. It regularly uses its cash hoard to repurchase shares and acquire firms.

Despite global economic uncertainty, Cisco expects revenue to grow one percent to four percent on increased demand in its second fiscal quarter ending in January. That would mean its first quarterly revenue growth in a year.

The consensus analyst recommendation on shares of Cisco is "buy", according to Thomson Reuters, consisting of 16 "strong buys", 10 "buys," 13 "holds", one "underperform" and one "sell".

Cisco recently joined with data storage firm EMC to offer bundled computing gear and services, going after Hewlett-Packard and IBM in the market for computing products, consulting and maintenance.

It has unveiled a new version of its Internet service router, which is a core networking device by which big businesses access the Internet, as well as several other new routers. It wants to make it clear that in its expansion steps it is not leaving its networking roots behind.

Earnings for the fiscal year ending next July are expected to rise four percent and the following fiscal year increase 13 percent. The five-year annualised earnings growth rate is projected to be 10 percent versus 12 percent expected for the networking and communication devices industry.

Q. Can MFS New Discovery Fund continue to do as well as it has recently? Is it still worth holding? — LC, via the Internet.

A. It sticks to its philosophy of finding fast-growing, quality firms with good earnings, while limiting its sector bets versus the Russell 2000 Growth Index.

Over the past 12 months that game plan paid off.

The $642 million MFS New Discovery Fund "A" is up 66 percent over the past 12 months to rank in the top percentile of small growth funds. Its three-year annualised decline of one percent places it in the top nine percent of its peers.

Thomas Wetherald, part of the management team since mid-2004, became portfolio manager in early 2005. He splits his portfolio among solid grower, emerging grower and out-of-favor stocks. He has more than $1 million of his own money invested in the fund, which is an indication he is on the side of his shareholders.

MFS portfolio managers typically begin as analysts who prove their stock-picking skill and work their way up at this established but low-profile fund operation.

"Before the current manager, there wasn't much to recommend about this fund, but he's doing the right things," said Bridget Hughes, analyst with Morningstar Inc. in Chicago. "However, it won't be a slow and steady ride, and you can't expect these kinds of returns all the time, since there will be volatility and underperformance in some market environments."

Health care represents about 18 percent of MFS New Discovery, with other concentrations in consumer services, software, industrial materials and financial services. Top holdings include CoStar Group, Hittite Microwave, Silicon Laboratories, Micros Systems, Nuance Communications, Mindray Medical International Ltd., ARM Holdings plc., Jones Lang LaSalle and Zumiez.

This 5.75 percent "load" (sales charge) fund requires a $1,000 minimum initial investment and has a 1.51 percent annual expense ratio.

MFS is majority-owned by Canadian insurer SunLife Financial, which in 2006 considered selling the fund operation but decided against it. Its subsequent launching of new funds would seem to indicate that the company is seeking to add assets to increase income from the fund business.

Q. What portion of a home is deductible for a home office? — NS, via the Internet.

A. The IRS requires that to be claimed as a business deduction the home office must be used "exclusively and regularly" as either your principal place of business; as a place to meet or deal with patients, clients or customers in the normal course of your business; or as a place for storage of inventory or product sample.

"You definitely can't use it part of the time for personal use," said Mitchell Kauffman, certified financial planner with Kauffman Wealth Services in Pasadena, California.

The amount deducted depends on the percentage of your home that is used for business. For example, if the office represents 10 percent of your square footage, use that percentage to apply to indirect expenses such as rent, interest on the mortgage, real estate taxes, insurance, repairs and utilities, said Kauffman.

"Then, of course, you can write off direct business expenses such as a dedicated business phone line, supplies and computer equipment," Kauffman added.

Taxpayers can't deduct expenses for any portion of the year during which there was no business use of the home. If gross income from business use is less than the total business expenses, the deduction for certain expenses is limited by the IRS.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, 555 N Central Ave., Suite 302, Phoenix, AZ 85004-1248, or by e-mail at andrewinv@aol.com

(C) 2009 TRIBUNE MEDIA SERVICES INC.