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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 75.19

-0.1%

Jan 16 3:59 PM EST

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To: bambs who wrote (41519)	10/26/2000 10:58:50 AM
From: The Phoenix	Read Replies (1) of 77400

Bambs, This is a frequent issue with you. The communications sector continues to be very fluid - lots a start-ups - IPO's - acquisitions - mergers. It's unlike more established sectors where there is very little of this activity. Growth rates are far more accelerated as well.. PE is perhaps not the best measure of a company's health or liklihood of success. In this environment many of the "big dogs" are buying up technology and these acquisitions have a short term cost which must be written down. After the costs are exhausted you're left with a company that is a strong going concern with excellent engineering talent allowing continued execution. So, wrt to the "E" in NT's PE they are writing down what appear to be some good acquisitions which will help them to continue to excell in the optical space. (Bay is suspect.) When these costs are exhausted (I think they use a 3 year straight line method) then the earnings from operations will look purt darn good. Remember - buy low - sell high. ;) At 40%+ revenue growth and trading at 4.5 times revenues.. looks pretty good to me.... again long term... not a day trade.

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