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

To: uu who wrote (48571)	2/8/2001 3:34:50 PM
From: Tulvio Durand	Respond to of 77400

'It's probably too late to sell, so it's probably a buying opportunity,' Morgridge quipped to a friendly crowd at the seminar on Wednesday. ameritradeindex.com CISCO SYSTEMS (CSCO) was the focus of most of the activity on the Ameritrade Online Investor Index. It accounted for 82.87 percent of the activity on the buy side and 1.98 percent on the sell side. For buyers and sellers it was the most active. CISCO closed at 31 1/16 , off 4 11/16 (13 percent) after setting a 52 week low of 29 7/8. Volume rose to 5 times the normal turnover. The shares are now off 62.1 percent from their highest price ever which was set last March. While investors generally were mostly selling CISCO, John Morgridge, the company's chairman, spoke to a seminar sponsored by the Anderson School of Business at UCLA. 'Well, we got a haircut,' he said in a sardonic reference to the company's dramatic slide in share price. The retreat has dropped the stock to levels it hasn't seen in nearly two years. 'It's probably too late to sell, so it's probably a buying opportunity,' Morgridge quipped to a friendly crowd at the seminar on Wednesday. More seriously, in the wake of CISCO's first slip below a consensus earnings number in six years, he said he took the long view. 'CISCO has been good at identifying changes. We've always been good at market transitions and change in many forms,' he said. Change is opportunity, he preached, citing the company's decision to invest more heavily in China even near the height of the Asian currency crisis. In three years CISCO built a China staff of 25 to over 250. Meantime, eight different brokerage firms lowered their ratings even though the company did far better than most companies ever have. CSCO's $6.75 billion revenue was 55 percent above the quarter a year ago. Net income for the quarter was $1.33 billion, which topped last year's quarter by 48 percent and the 18 cent a share result (a penny below analyst expectations) was up 50 percent from 2000's quarter. But CISCO's chief executive officer, John Chambers, said in a conference call to analysts that the company's third quarter would be either flat or down and the fourth quarter would probably be flat as well. The problem is that rugged new players are at long last challenging the networking behemoth and, finally, effectively. The biggest thorn in CISCO's hide is the super growth JUNIPER. JUNIPER NETWORKS (JNPR) , second most bought stock and third most sold, a specialist in routers directing Internet data traffic for big communications firms, fell 7 13/16 to 94 3/8 (7.65 percent on 1.6 times normal volume. It is down 61 percent from the October high. JUNIPER is playing Little David to CISCO's Goliath and while it has gouged out a chunk of its larger rival it hasn't and clearly won't fell the giant. JNPR has avoided the headaches of dealing with systems that power everything from big Internet service providers to consumer home network products. It focuses more tightly. Carl Schowalter, JUNIPER's marketing VP says, 'We're big believers in focus because in previous lives we were all in organizations that diversified too fast and lost their edge in the place they were best.' BusinessWeek's Jane Black writes, that approach has let Juniper 'grab 30 percent of the market in its sector in a mere two years. Analysts expect it to gain an additional 4 to 8 points of share on Cisco next year.' CISCO has been playing catch up for nearly a year but has to juggle a soup to nuts line of other products, some of them acquired. Recently, CSCO announced its 12400 series router that can push data through networks at speeds of up to 10 gigabits per second. But JUNIPER's routers have been running at that speed since March. And analysts note that Juniper's devices are technically advanced in that the hardware does most of the data processing. CISCO routers rely on software which slows the process. Sometime later this year, JUNIPER NETWORKS is expected to offer a new high end router that can push 20 gigabits per second. But the clientele is looking for faster speeds still. AVICI SYSTEMS (AVCI) offers a challenge with its scalable routers that can carry five times more data than the current JUNIPER models.