RE: CSCO valuation:
I'm not sure I have much useful to say. I think the future is uncertain, and the historical numbers are suspect (due to all the Creative Accounting and Bubble-inflated results), so it is very hard, right now, to decide what I should be willing to pay for a CSCO share. In addition, I think telecom equip spending is likely to be lower in 2002 than in 2001, and not pick up until 2003. So, I've got a while, probably till mid-2002, before this stock is going to take off, is my guess. I think I'll just let the dust settle, wait till the restructuring and "special charges" are all done, wait till investors have despaired of an upturn, wait till 100-200B of bad telecom debt has been written off, then come back and look at this sector, company and stock closely. I'm taking the same attitude with JDSU.
Using forward 12Month, or trailing 12Month, PE or P/S, the stock looks overvalued. But I wouldn't argue with anyone who said those are trough earnings and sales in the ratios, and it isn't fair to use them to value the company. So, buying (or holding) today, an investor is paying for results more than 12 months out. And, IMO, results that far out are unknowable, given the current macro and industry conditions. So, I'm patiently following events, but firmly on the sidelines. |
