Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Adam Nash who wrote (48796)	2/10/2001 10:24:32 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

Hi Adam - have you done a FCF analysis lately and carved out sources? Might be useful to post to the thread. John.

To: Adam Nash who wrote (48796)	2/11/2001 8:17:40 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 77400

One thing about the market--it's always moving the goalposts. There was a time last year where Cisco was over half a trillion, trading at a huge multiple to trailing revenues. And now we're down to 10-point-something times revs. What does it mean? All depends where the goalposts are going next. Just as the market became increasingly accommodative of bloated metrics on the way up, it may become rather restrictive on the way down. Heck, there may even come a time when people care about cash and dividends. I know, it's crazy.... Under those types of conditions, and if Cisco were to slow to the point where long-term growth is on the order of 10-12%, a whole new valuation could take over. In that scenario, lower prices could be justified imho. If you do a FCF analysis, be sure to consider dilution from the ever-rising sharecount. Jubak forgot that when he calculated a $35/49 target for Cisco in 02.

To: Adam Nash who wrote (48796)	2/11/2001 9:47:47 AM
From: John Malloy	Respond to of 77400

Adam, << . . .remember, P/E is just a very roughshod approach at getting at discounted free cash flow. Very roughshod What Cisco is worth depends on the cash that will flow into your pocket if you buy the stock. Free cash flow is an important metric, but it doesn't wind up in your pocket. Since Cisco doesn't pay dividends, the only cash Cisco will put in your pocket is the net proceeds when you eventually sell the stock. The focus ought to be on projections of Cisco's future price. John Malloy