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

To: Wyätt Gwyön who wrote (51420)	4/15/2001 5:33:07 PM
From: Ed Forrest	Respond to of 77400

MM Going to be real interesting as to what the Globex futures look like later on this evening. Wouldn't surprise me at all to see some red numbers. Ed

To: Wyätt Gwyön who wrote (51420)	4/15/2001 5:46:34 PM
From: Ed Forrest	Read Replies (1) \| Respond to of 77400

Cisco Systems. (Special Report)(financial analysis)(Brief Article) Jon Birger. Full Text: COPYRIGHT 2001 Time, Inc. Cisco, the nation's leading Internet infrastructure company, has also been the nation's premier tech stock, putting together a 10-year run of high-double- and low-triple-digit earnings increases. It's a record exceeded only by IBM in the heyday of the mainframe computer. But with the economy slowing and corporations struggling to wring value out of the Net, Cisco is facing single-digit earnings growth in 2001. With its prospects dimmed, Cisco has seen its stock price plummet 77% from its peak. So is this a buying opportunity--or a signal that Cisco's reign is ending? OPPORTUNITIES --Still the gorilla. Cisco dominates communications networks, with the No. 1 market share in 19 areas and the best all-around line of networking products available. Growth may be slowing across the industry, but earnings at Cisco were still up 55% over the past four quarters, and the company now has some $4 billion in cash on hand. Thanks to aggressive acquisitions of cutting-edge firms, Cisco has been able to retain a technological edge over its competitors and it remains the vendor to beat. --Survivor. Especially in a weak economy, corporate buyers favor established suppliers they know are going to be around when it comes time to service or replace equipment. That's good for Cisco and bad for up-and-coming rivals like Juniper and Sycamore. RISKS --Customer cutbacks. The Internet infrastructure boom was financed largely by junk bonds and initial public stock offerings. Now those markets are all but closed to Internet and telecom issuers. So there's a lot less money around to buy Cisco routers, switches and other equipment. --Excess capacity. There are three times as many fiber-optic-network operators as North America needs, estimates Sanford C. Bernstein analyst Paul Sagawa. As the industry retrenches, demand for Cisco products may stall. --Valuation. Cisco is still a pricey stock. While the P/E has dropped from an astronomical 196, it's still a hefty 34. Cisco projects annual earnings growth of 30%, but in light of its customers' woes, that may be optimistic. Two recently departed Cisco executives we spoke with argue that the best-case scenario is 15% to 20% growth per year. --J.B.