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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 74.59+0.3%Jan 23 9:30 AM EST
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To: kvkkc1 who wrote (56746)1/17/2002 8:25:46 AM
From: Dave  Read Replies (1) of 77400
 
kvkkc,

First, there are two points to consider:

(1) Cisco the company; and
(2) Cisco the stock.

I am of the opinion that we all agree that "Cisco the company" is a dominant force in the networking industry.

The question then becomes, how much is the "individual investor" willing to pay for "Cisco the stock"? Cash Flows from Operations, Earnings, and EPS numbers have declined significantly and that directly correlates with "Cisco the stock".

Another question is: Is "Cisco the stock" priced fairly with respect to the *perception* of future growth? Is "Cisco the stock" accurately priced? I believe the answer is NO, since bulls perceive "Cisco the stock" to be undervalued with respect to its future growth prospects, while Bears perceive that "Cisco the stock" is overvalued with respect to its future growth prospects.

Perhaps, FY02 EPS and Cash Flow estimates are not a good indicator of the "value" of "Cisco the stock". Therefore, what are the expectations for FY03, and beyond? Will "Cisco the company" be able to grow revenues/net income by 30-50% per annum? If so, will EPS grow at the same "pace"?

Those questions must be answered in order for an "investor" to have an adequate opinion as to whether "Cisco the stock" is to be purchased, or sold short.
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