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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: The Phoenix who wrote (39256)	8/10/2000 9:45:07 AM
From: kvkkc1	Read Replies (2) \| Respond to of 77397

Gary, Very reasonable post. I have been a lurker for years, so I never could join in, but you have for the most part been one of the most reasonable posters on the board. Some people always want to preach some method of valuation that the various money managers profess, but most of them are failing to beat the benchmarks. What do they know that they are going to tell people before they have the opportunity to profit from it? Nada. Many folks who continuously post negative opinions here are short term traders who think they are going to get rich shorting and live the good life. We all guestimate what a company will do, and there are many who disagree. Those who criticize the CSCO financials are free to short the stock, which would have been a losing proposition over the last 7 years with 3 notable exceptions. Your post pointed toward the expanding markets for CSCO and other networking companies who can all be successful. There will probably not be one company who gets 100% market share in the next few years. The rule for LTBH investing is to stick with the stock until the fundamentals change. CSCO has not experienced a change in the fundamentals and continues to be valued as such. If their growth moderates, then it will be time to re-evaluate the fundamentals. Although I don't believe the TMs here make any difference in the stock price, they have definitely reduced the effectiveness of the thread over the years.knc

To: The Phoenix who wrote (39256)	8/10/2000 11:08:45 AM
From: The Phoenix	Read Replies (4) \| Respond to of 77397

More random musings... Cisco earned .53 cents this year - 47% gain over last year. This yeilds a backward PE of 125. Of course in high earnings growth markets backward PE doesn't mean much. Next years' consensus estimate is 72 (or 76 is you believe that Cisco will beat by a penny each quarter). These numbers put earnings growth in the 36%-43% range. If we take the middle of the road - say .74 then Cisco's forward PE - based on consensus would be 89. Yes it may seem high. Let's look at some data points. Bearish target discussed here of $35. Forward 01 PE would be 47 - right in line with earnings growth but behind projected 2002 growth and ignores industry growth and Cisco execution. Bearish target of $50/share. Forward 01 PE would be 56. Premium for this year but below targets for 2002. Looks like a reasonable floor price and a buy IMO. I don't think we will break through this support. Current resistance at $60/share. Forward 01 PE would be 81. Premium price and takes into account forward earnings growth and expectations in market growth and enterprise positioning. However this based upon consensus numbers which could be raised....and are below 2000 earnings growth. $60 is not a "priced to perfection" number and seems like a reasonable support level. Bullish price of $75/share. Forward PE would be 100. High but still well off YR 2000 levels. Possible 2001 earnings of 80 cents (in line with 2000 earnings growth of 47%) and future earnings growth expectations could make this possible. Priced to perfection? Perhaps? Again... just random thoughts for the thread... OG