GV- (1) What % of Cisco's "premium" is due to the fact that it is one of the most liquid of all liquid big-cap (techs)?...that big money managers can easily unload huge positions without tanking the stock..
I would say that (that) is a reasonable explanation for some of the premium...
(2) Also, consistency and quality of management should be worth some sort of "premium",no?.......after all, 30-50% growth projections for all companies are NOT the same (if you know what I mean)...take 2 companies, COMPANY A and COMPANY B...if both have similar growth projection going forwards, but only COMPANY A's management has been consistent in meeting/exceeding projection in the past....would you say that both companies are worthy of the same PEG?.......or would you argue, that the certainty of these projections is already included in the their price....or that the "inferior" companies should be discounted, not Cisco (receiving a premium)..
That, too, is a possible explanation for a premium...
(3) Perhaps, too, the market is telling us that the internet is the....or one of the most CERTAIN growth drivers for many, many years....good economic times, or bad...the internet infrastructure WILL be built (with a certainty rarely seen in economic history)....Let's compare Cisco's growth path....to the certainty (or uncertainty) that Coca-Cola would rapidly grow in international markets in 1970's/1980's...or that Wal-Mart would come to so decimate all other retailers in the 1980's and 1990's...maybe the market is telling us that the Cisco growth story is one of the surest things over the next 10 years, and that the company's stock should be rewarded as a result (with a premium)..
Add up the 3 listed factors, I think one could make a pretty decent argument for a pretty decent premium for Cisco's stock... |
