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

To: Amy J who wrote (67047)	2/12/2005 10:11:07 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

Not sure. Interest rates don't really hurt companies like Cisco, because they don't borrow money. If anything, higher interest rates help them, because they make more money on their short term investments. However, I think the contraction of PEs that Cisco has experienced is normal. They are no longer a growth company. Chambers is in denial. But what I'm hoping for is that with options expensing, that will be the first step in popping the denial bubble within Chambers' executive staff. Then they will reduce stock options dilution. I believe they will continue to buy back shares aggressively with their massive cash inflows. With topline growth between 10-15% for the next 4 years and bottom line growth of around 20%, due to buybacks, the PE won't continue to contract as value investors realize it should be in their portfolio and start to pour in. I bet we could see $30-35 per share within 3 years. That's a double from here and is in line with what I think the EPS growth will be after they reduce options dilution in the second half of this year. Of course, I could be wrong, and Cisco's executives could continue to give away the store to the employees. If that happens, then the stock will never move. I'll wait for a year to a year and a half. If they haven't stemmed the flood of dilution by then, I'll sell and never buy back in until they do so. But we'll see. I think they'll have to, because I don't think they will have any choices left, if they really care about increasing the stock price. And for that, I'm counting on greed. The executives have millions of options. Greed will kick in and patience with a stock that doesn't move will wear thin. They will do what they have to do to get that stock price moving upwards again. I'm sure of it and that's why I bought stock again recently. My contrarian bets have usually been my best ones I hope I'm right again this time. :)