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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.03

+0.8%

Nov 14 9:30 AM EST

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To: casey (guessed password) who wrote (5853)	4/25/1997 5:15:00 AM
From: craig crawford	of 77399

To All CSCO fans. Do not despair! I have been reading all this bantering about between CSCO bulls/bears and all these nervous nellies predictions with great interest. It has been entertaining. With CSCO's earnings report fast approaching, I thought I would post some historical FACTS that might make some of you all feel better. I acquired most of these facts from IBD articles that I saved for days like these. Let me say that I hope CSCO's earnings are in-line or a penny under and the stock gets crushed. I will use this as a buying opportunity. Right now I simply trade CSCO. Hell, it's not very hard to do. Now for the history lesson: 1. CSCO came public in Feb '90 at $18 2. After coming public CSCO reported earnings as follows: Q1 '90 - EPS up 200% Q2 '90 - EPS up 250% Q3 '90 - EPS up 167% Q4 '90 - EPS up 160% (notice the decline for a couple of Q's) Q1 '91 - EPS up 183% Q2 '91 - EPS up 157% Q3 '91 - EPS up 162% Q4 '91 - EPS up 92% (breaking a string of 12 straight triple digit Q's of EPS and Revenue growth) Well we all know now that CSCO's stock kept climbing even with Q4 '91 EPS up only 92%. Source for the above - IBD Aug 20, 1996. Now let's jump ahead a few years to May 13, 1994... CSCO reported earnings that Friday. EPS up only 78% from a strong year-ago period, only meeting expectations after beating them for 3 years. CSCO's stock was already down 25%. After their earnings report CSCO declines another 26% in it's worst week ever. Their stock price was cut in half. Analysts declared LAN's had seen the last of their explosive growth. This was amid a tech bear market where leaders fell between 30-50%. (Sound familiar?) So you see folks, another buying opportunity presented itself... Source - IBD Aug. 30, 1996. You want more CSCO fans? Well I've got more! IBD Apr 23, 1997 (just yesterday) has an article about profit forecasts. The article mentions Intel disappointed the street 4 times in the last 3 1/2 years. It mentions INTC falling 33% from Oct. '95 to Jan '96. Where is it now? Furthermore, it states in the same article that on July 18, 1995 MSFT warned of slower growth and it's stock tumbled as much as 11% that day. Operating profit had grown only 4% in the latest quarter. It was down 27% the next 2 months. Where is MSFT today? My advice to all is to use opportunities such as the one that we are presented with recently to invest in quality companies such as Cisco for the long term. Little bumps in the road like these can be overcome by quality management. Cisco has quality management. Also, use opportunities like this to invest in quality high growth companies that are beaten down by a tech bear market. You know ASND came public the very day that CSCO reported disappointing earnings in the tech bear market of '94. It dropped around 25% or so below it's offering price and subsequently rose over 30 fold in less than 2 years. I think that CSCO fans should bookmark this post and read it everytime they are feeling a little down... Good luck to all.

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