Interesting piece on Cisco, Scott. It's been one of my core holdings since 1997 (with a 6 month respite in 1999 while I concentrated on the Q), and I view it as one of the finest enterprises in history.
A few things crossed my mind when I read the analysis, such as,
Who is the Bull Market Report? Do they have a track record?
They said, "Historically, the PE should be 32, since this is the company's current earnings growth rate", but the 5 year earnings cgr is 39.2%, and last quarter's was 69% YOY. Here's the quote from their earnings press release:
Net sales for the fourth quarter of fiscal 2000 were $5.72 billion, compared with $3.56 billion for the
same period last year, an increase of 61%. Pro forma net income, which excludes the effects of
acquisition charges, payroll tax on stock option exercises, and net gains realized on minority
investments, was $1.20 billion or $0.16 per share for the fourth quarter of fiscal 2000, compared with
pro forma net income of $710 million or $0.10 per share for the fourth quarter of fiscal 1999,
increases of 69% and 60%, respectively.
Perhaps the Bull Market Report doesn't know the difference between a raw and a pro forma report, or maybe they just didn't do their homework. Be that as it may, Cisco concerns me the least of all of my holdings; it's the bedrock of my portfolio.
uf |
