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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 652.56-1.5%Nov 20 4:00 PM EST
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To: el paradisio who wrote (49184)5/3/2000 12:59:00 PM
From: pater tenebrarum  Read Replies (2) of 99985
 
el p, i'm only optimistic with regards to their upcoming quarterly report. they're going to beat estimates by 1 cent as usual. they're taking over 20-30 companies a year to buy in research, and to be able to massage their earnings reports, an art they have more or less perfected. i am NOT sanguine about the stock...it's by far the most overvalued big cap stock there is. the valuation is simply totally at odds with any discounting model that's even remotely grounded in reality.
it has 7 billion shares outstanding...that's a lot of potential selling pressure should it ever disappoint...even if it only tries to guide expectations lower, that would be all it takes imo.
of course it's also a major holding of many of the big fund companies, e.g. Janus has gobs of CSCO stock in virtually every single fund it offers. so there's always a lot of tape painting and manipulation in that stock, as it is so important for making these funds look good.
all that said, i do not doubt for a minute that it's an excellent company with an excellent record of execution. but that doesn't change my view that it's wildly overvalued. yes, it deserves a high p/e. but not 200....

regards,

hb
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