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Strategies & Market Trends : Z Best Place to Talk Stocks

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To: Larry S. who wrote (52828)	2/9/2005 7:57:00 AM
From: DanZ	of 53068

I don't think that Cisco is attractive at 18. Last night's report revealed the company's rising inventory, lower margins, and lower revenue outlook for next quarter. The stock has some chart support at about 17.50, but I think it could break that after last night's report. The stock isn't cheap and the analysts are too bullish on it. 24 out of 40 analysts have it rated Strong Buy or Buy, and they project 15% earnings growth over the next five years even though Cisco's growth actually slowed to about 10% the past five years. Cisco's $5.8B cash position looks big, but it amounts to only $0.90 per share. The PE is obviously a lot lower than it was a few years ago, but the stock still isn't cheap, their growth has slowed, analysts are still too bullish, and I personally think that it has more downside from 18 than upside.

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