Stock Attack II - A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack II - A Complete Analysis

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To: dennis michael patterson who wrote (4925)	4/4/2001 9:43:35 AM
From: dennis michael patterson	Read Replies (3) of 52237

JAN CRAWLEY!!!! Cisco Won't Be a 'Value' for a Long Time By James J. Cramer 4/4/01 9:30 AM ET The Merrill Lynch research report on Cisco (CSCO:Nasdaq - news - boards), out today, simply asks, "A New Value Stock?" And it immediately answers the question: No, with a number cut and words that say that business has deteriorated over the last several weeks and that the revenue targets are going to be missed. Value stocks, by the way, don't have endless number cuts and don't sell at 27 times earnings, as Cisco still does at $13. Value stocks sell at low multiples to earnings and tend not to have massive percentage number cuts on a weekly basis. What would make Cisco a value stock? When would it be "cheap?" Understand this, Cisco will get cheap when its whole shareholder base changes because no one who owns it is a value stock player. It won't reach those value levels until numbers get taken down substantially from where they are right now. Because I think Cisco will have a very hard time making money this quarter. That's right, making money. For all of the reasons we have gone over here time and again. If you are waiting for tech stocks to become value stocks, may I suggest you again refer to my piece analogizing telco equipment and disk drives. During the seven-year period it took for drive stocks to go from being growth to value equities we saw repeated attempts to describe them as value plays. It was only until they lost money for many years, totally changed hands and settled into a low level of profitability that they ultimately attracted value buyers. You can't wait that long if you are in Cisco for that to happen. You might not live long enough to see the transformation.

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