Caveat on Cisco!!!!!!!!!!
Fortune Magazine, November 13, 2000, by Bethany Mclean,Page 430.
...With option expenses included, Cisco's most recent filing discloses that in the year ended in July, its earnings of 21 cents a share were actually flat with 1999. (Cisco's filing notes that "in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the company's options." Of course not.)...
Knowing the aforementioned and the fact that Cisco will no longer be permitted to use the pooling of interest principle next year, the company is going to have to show some real earnings growth.
Faced with the slow down in the Telecom sector and the loss of market share, in the high end router market, to nimbler competition such as Juniper, Cisco is faced with lots of uncertainty in the coming quarters.
Owing to its' size, competition, and slower growth, Cisco will be hard pressed to justify its' current multiples. For this reason I surmise Cisco to fall to the low $40's. |
