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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 72.99-2.0%12:12 PM EST
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To: Lizzie Tudor who wrote (66785)1/2/2005 7:24:16 PM
From: pfalk  Read Replies (2) of 77397
 
No Lizzi,

That's just what we've been talking about: Cisco is NOT done with its growth - it's growing by between 15% and 25% per year (depending on whether you measure revenu, gross profit or net profit).

The problem is that none of that goes to the share-holders - it's mostly handed out to the employees (and the bulk of that goes to management).

Even the stock re-purchase program which has the potential to enrich share-holders, is suspect: I believe it is a ploy to increase share prices, so that stock-options become more valuable.

As has been stated here before: It would be better if we saw a dividend payout: It would go directly to the owners and not to the employees.

A fortune 500 company which is growing by ~20% is quite assuredly not done with its growth - You can easily realize this if you consider the growth areas of Cisco: Security, VoIP and Wireless. Each one of these has the potential to become a bigger revenue source than Cisco's current total revenu, within the next 10 years.

If (and only if) there was a reasonable probability that Cisco would stop giving away the store to the emoployees, then it would be an excellent growth stock.

A year ago we had an excersice where folks guessed at the stock price today. Most guesses came in somewhere in the $30 range. I think what we did wrong was that we assumed that the enhanced value would go to share-holders rather than employees.

P.
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