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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.09

-1.1%

11:22 AM EST

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To: Gary105 who wrote (18105)	10/11/1998 1:33:00 PM
From: Joseph G.	Read Replies (2) of 77400

<<based on EPS projections of 25% growth >> analysts project 22%, NOT 25% <<Years ago it was growing EPS 50% and selling at trailing p/e of 50. >> This is NOT true. I bot it Aug 12, 1994 for $21. At that time it traded for four months between $18.5 and $25. ('94 fiscal year ends July 31, 1994) EPS '93 (actual) = $0.66 EPS '94 E = $1.19 gives 12 month trailing P/E = 21/1.19 = 17.6; EPS '95 E = $1.72 gives current FY estimated P/E = 21/1.72 = 12.2. Estimated growth rates: 93/94 = 1.19/0.66 = 80% 95/94 = 1.72/1.19 = 45% << A p/e higher than growth rate is justified by low interest environment>> Need I remind you that in early '94 short term rates were 3.25% and long T-bond was under 5% ? Today interest rates are (a little) higher than January 1, 1994.

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