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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Mike Buckley who wrote (1766)5/7/1999 1:38:00 AM
From: Uncle Frank  Read Replies (3) of 54805
 
One of our threadmates commented that we were in danger of becoming the Qualcomm thread's mirror site. Looking back on recent posts, I think he has a good point, but it has been a compelling experience <g>. I'd like to propose that we review some of our other core holdings and quit gloating about Q... well, maybe a little bit of gloating would be OK.

My second largest holding (I won't mention the first) is Cisco. Earnings are due out on 5/11, and there are a few things to watch out for. EPS is not one of them. Cisco has set the standard for managing the analysts' expectations, then beating by a penny. Revenue growth will be key as will be gross margins. Critics say csco will be unable to maintain their >50% 5 year earnings cgr, and that competition will cause their 65% gross margins to begin eroding. In other words, they feel my fair Gorilla is turning into a Microsoft-like Silverback. Imo, they are premature.

Cisco has been trading in a fairly narrow range since their last report. Some point to the lack of an anticipated split; OK make that I point to the lack of a split. Hopefully Mr. Chambers will do the expected this time. This is a 14 week quarter for csco, so we may see more that a one penny earnings surprise. The problem as I see it is that this market won't reward an ordinary, magnificent, quarter. If we don't get the split, I think we may be stuck in the 100-125 range for another 90 days.

Frank
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