Cisco Systems, Inc. (CSCO) Message Board

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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.15

+4.3%

10:35 AM EST

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To: RetiredNow who wrote (53124)	5/18/2001 11:12:24 AM
From: Stock Farmer	Read Replies (1) of 77398

mindmeld: Digital distribution impact on CSCO Ok... Sure it's a thriving industry. But before touting too much of it as justification for reinflating the CSCO air mattress, maybe you should do some math. The absolute maximum CSCO could book in revenue would be if they attracted 99.9% of the current costs of distribution being displaced. But it's more likely they will be able to take in some 15% of 15% of 15% of the cost by the time everyone in the food chain gets their palm appropriately greased for taking "some of the issues" off the table. Now, $30 at a PE of 20 means $1.50 EPS @ 15% net margin = $10.00 revenue/share = $75 B$/year or somewhere just shy of 4x current revenues. Which isn't going to happen in 2002. [EDIT: 75 B$ is 15% of 15% of 15% of 22 Trillion dollars] I can understand purchasing CSCO on a position trade with tight stops, profiting from momentum and a momentary "sproing" away from $20 that is growing more likely to happen with gusto. But a long [EDIT: LTBH] position? Foolishness. IMHO.

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