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

To: Lizzie Tudor who wrote (65669)	7/1/2004 1:03:11 PM
From: Kirk ©	Read Replies (2) \| Respond to of 77400

Lizzie "ONLY if the senior management at cisco is willing to accept the decline in buying power from the US-base. If Cisco is willing to accept mexico gross margins WORLDWIDE, then by all means move your entire workforce offshore." The idea is to make it up on volume. Also, if Cisco doesn't move the jobs offshore, then someone else will and take their US business away with lower costs. THAT is the reality. Of course, my job at HP for 20 years was to design products we first build in the US then ship the mfg over to Asia.... when I left, we were shifting much of the design jobs and the good jobs left were inventing new technology. The most interesting thing is we had far fewer admins per engineer than 20 years earlier due to PCs. In the 1980's, most first level managers with a staff had an admin... this was not the case when I left.

To: Lizzie Tudor who wrote (65669)	7/1/2004 1:55:54 PM
From: Elroy	Read Replies (1) \| Respond to of 77400

When will CSCO hit $40? That would imply a market cap of about $250 billion. Assuming CSCO's cash position stays at about $20 billion, a $40 share price would imply about a $230 billion enteprise value. CSCO generally trades at about (or above) 23x earnings if you exclude their cash position from the share price, so I think CSCO stock will hit $40 (and the company have a value of $230 billion) when the company is about to generate $10 billion in net income over the next 12 months. That's about $14 billion in pre-tax operating income. Since CSCO's operating margins are about 30%, that implies annual revenues of about $47 billion (yowza!). So how long will it take for CSCO to be about to produce $47 billion in revenues? I think CSCO is expected to do about $23 billion or so over the next 12 months, and if they can grow revenues at a Dell-like 18% per year, it will take them 4 years to have $47 billion in expected revenues. So, the easy answer is, CSCO shares will hit $40 in 4 years, give or take a year! Next question?! Elroy Time to go watch the euro-cup semis (Czech versus Greece)! Maybe when I get back in a few hours the market will have turned around and CSCO will have made it half way to $40.....??

To: Lizzie Tudor who wrote (65669)	7/1/2004 4:18:56 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

Cisco will hit $40, when their revenues grow from $20B to something closer to $30B, while their bottom line continues to grow at prorata, or when the market gets frothy again. Cisco can only achieve stock price growth if it keeps it's margins high, which means they have to offshore to cut costs. That's elementary business management.

To: Lizzie Tudor who wrote (65669)	7/1/2004 10:02:55 PM
From: Paul V.	Read Replies (2) \| Respond to of 77400

Lizzie,>Tell me when you think Cisco stock will hit $40. I don't think its possible thanks to globalization. < If my general understanding is correct then the major cost (salary, fringes, etc.)of producing a service or product is 65-70 +/-%. If a corporation can mantain its current price then gross and net profit margin will increase to the benefit of the investor. Therefore, it is to the benefit of the corporation to keep its payroll and benefits as low as possible without reducing the quality of the product. Greenspan would call this increased productivity. Increased productivity increases the investors profit all things being equal. Therefore globilization is great for the invistor class. Not so for the US worker. Paul