Tom,
I was just trying to point out that Cascade's revenue and earnings
growth really do justify a P/E of approx. 100. Go to the
Wall Street Journal Briefing Book Financial Overview page for
Cascade at:
update.wsj.com
to see their quarterly numbers for the last two years.
This rate of earnings growth gives us a pretty reasonable
PEG (Price/Earnings/Growth) ratio, I think, at least for this
sector.
Cascade is #1 in the Internet Switch market, and supply fourteen
of the twenty-one largest telcom providers worldwide, as well as
three of the largest ISPs (UUNET, NetCom, and PSINet). I have read
only good things about the flexibility, scalability, and
network management capabilities of their products. Basically,
their products give ISPs, telcos, and companies with private
enterprise networks a gradual, modular way of migrating to faster
technologies like Frame Relay and ATM.
I think that this is a great, global market, with tremendous
upside potential. STRM is number 2 in this market, and their revenue
and earnings growth, at least for the last year, are not as impressive
as Cascades. (See same URL as above, but substitute STRM for CSCC).
They do have a lower P/E (64), though. If you have any knowledge
about new products from STRM that you think change the competitive
balance, please let me know.
Also, as a long term investor (and by that I only mean that I am
not a trader doing technical stock analysis), I was not recommending
that anyone go out and buy a ton of CSCC at $111. I have been
periodically buying CSCC as the situation develops - my last buy
was at $91.
Bill |
