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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 77.42+4.6%3:59 PM EST
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To: Stock Farmer who wrote (51162)4/6/2001 10:18:43 AM
From: RetiredNow  Read Replies (1) of 77398
 
It sounds about right. Except, I don't see it like you do.
Cisco is still making money, and lots of it. They are a
positive cashflow company, so their cash and investments
hoard may fluctuate with the markets, but they won't go
have to borrow money to finance operations, because they
are still making money and their margins are incredible.
Check out their last 4 quarters performance:

Apr-00 Jul-00 Oct-00 Jan-01

Rev 4.919 5.782 6.519 6.748
13.1% 17.5% 12.7% 3.5%
Inv 0.878 1.232 1.956 2.533
26.3% 40.3% 58.8% 29.5%
A/R 1.900 2.299 2.887 3.512
11.0% 21.0% 25.6% 21.6%
OperCFL 0.629 1.621 1.363 2.826
-76.8% 157.7% -15.9% 107.3%

So what I see here is tremendous topline growth that is
ebbing due to the market. Increase in Inventories due to
component shortages and their erroneous belief that the
market was going to continue to expand. And an increase in
A/R as a %age of revs due to entering SP market and
mounting bad debts. So their financials have deteriorated.

However, they are still bring in more cash than they spend
every quarter. With the current cost cutting and layoffs
underway, they will STILL bring in more cash than they
spend every quarter. This company is a POSITIVE CASH FLOW
company. They WILL NOT be going bankrupt any time soon. The
entire Internet and networking market would have to
disappear overnight for Cisco to go bankrupt. This simply
is not going to happen, despite what the crazed critics on
this thread think. Stop panicking everyone. It's not the
end of the world. A year or two from now, this will all be
a bad memory and you will be basking in a double or more on
the stock you are purchasing now.
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