Well, I'll answer your question. Cisco is a great company because they are #1 or 2 in every segment they compete in, their products are high quality, and their service is unparalleled. In addition, their margins are astronomical. These are all the ingredients of a GREAT company. However, the stock is a different matter. The company policy is to dilute shareholder value and hand that value over to employees. That makes the stock suffer, which means it's not such a great stock. In addition, they are avoiding expensing the true cost of employees, which means that they are distorting the financial statements. Now my thought there is that if they are overpaying employees by handing out options like candy, especially now that there are a bunch of people with 20+ years of experience out their looking for a job. So if they were to stop their options giveaways and pay employees in cash, then their employee expenses would actually go down, which would benefit both the company and shareholders.
So again, I believe it is a great company, but a crappy stock. That's why I don't own any. |
