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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (51303)	5/9/2002 6:18:24 PM
From: Jacob Snyder	Read Replies (3) \| Respond to of 54805

EMC, NTAP: I'm going to be selling all my EMC 2004 calls, in increments, and putting the money into NTAP. Haven't decided whether to buy more 2004 NTAP calls, or just buy plain old boring stock. If NTAP is still below 17 when the 2005s become available, I'll be buying them. This is following the GG idea of selling the loser, and buying the winner, once you figure out which is which. I think I've now figured out (to my satisfaction) that NTAP is going to come out of this downturn a lot stronger than EMC. The last conference calls I've listened to, have been like night and day, on these two companies. The main problem with rotating into the winner, is that you don't get much for your loser, if you don't figure it out till everyone else already has.

To: Uncle Frank who wrote (51303)	5/10/2002 2:46:09 AM
From: stockman_scott	Respond to of 54805

Nice piece on CSCO from IBD: Thursday, May 9, 2002 Cisco Rebound Ignites Powerful Stock Surge; Will It Last This Time? BY MIKE ANGELL INVESTOR'S BUSINESS DAILY Sometimes a little bit of good news can make a big difference. Cisco Systems (CSCO) rescued tech stocks and the market from the doldrums Wednesday, thanks to strong third-quarter earnings. The Nasdaq soared 123 points, or 7.8%, for its eighth-best percentage gain ever. The Dow added 305 points, or 3.1%, and the S&P 500 39 points, or 3.8%. Don't get too excited, though. While Cisco's net soared 267% from a weak year ago and beat views by 2 cents, sales grew just 2%. It was cheaper supplies and efficiency, not growth, that boosted the bottom line. "There are not enough data, and it is too early to call a possible turnaround," CEO John Chambers said in a conference call Tuesday. Market analysts, while encouraged, tempered their views, too. "This market has been so negative for so long that when we do see a good move, we question it," said Brian Belski, market strategist for U.S. Bancorp Piper Jaffray. "Ultimately, that's healthy for the market." The results show Cisco runs an efficient business, says U.S. Bancorp Piper Jaffray tech analyst Ted Jackson. "The earnings surprise really got people excited," he said. But "that has no bearing on rate of growth for the company in the future." Small Sales Gain For the quarter ended last month, Cisco eked out its 2% gain in sales to $4.8 billion. Product sales fell slightly from last year — to $3.9 billion from $4 billion. Service sales grew 15% to $829 million. "Growth in the top line was really from services," Jackson said. "The performance of products was not quite as strong." Business spending on networking gear continued to keep Cisco afloat. But sales to the stumbling telecom sector offset that. Sales of high-end routers, optical gear and other telecom-specific gear fell 10% or more. As for Cisco's fourth quarter, Chambers expects sequential sales to be flat or slightly up. "I feel better about going into Q4, but still not great," he said. Analysts are trimming sales projections for the company, Jackson says. Cisco watchers expected sales growth of 15% to 20%. But absent a strong recovery, Cisco is more likely to see 10% to 15%. 'Subdued Recovery' For higher gains, telecom network spending would have to rise, Jackson says, and Cisco would have to get a larger share. "There's far more data out there in the market pointing to a more subdued recovery," Jackson said. Other financial data suggest a dismal sales outlook. Cisco's ratio of new product orders vs. orders shipped — the book-to-bill ratio — fell below 1. A ratio above 1 suggests the company will ship more orders in upcoming quarters. "They shipped out more product than they booked orders for," Jackson said. Another indicator of future sales growth — deferred revenue — was $3.8 billion, flat compared with the second fiscal quarter. Deferred revenue is for products sold but not shipped. Growing deferred revenue indicates a company is going to ship more products, and recognize more revenue, in upcoming quarters. Investors were more interested in Cisco's sharp earnings rise. Excluding one-time items, Cisco earned 11 cents a share in the quarter. That was up from 3 cents in the year-ago period. Analysts were expecting 9 cents. Almost all of that gain came from better gross margins. Excluding effects of Cisco's $2.2 billion inventory write-down last year, product gross margins were 61% compared with 53% a year ago.