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

To: Eric who wrote (10255)	11/5/1997 3:09:00 AM
From: Mark Ambrose	Respond to of 77400

Foolishly Speaking, CSCO was mentioned in Newbridge Networks opinion on The Evening News, for Nov. 4, 1997 on Yahoo Finance Motley Fool: Here is the URL: fool.yahoo.com ---------------------------------------------------------------------- GOATS Canadian manufacturer and marketer of local and wide area network products NEWBRIDGE NETWORKS (NYSE:NN - news) headed south today, falling $9 15/16 to $48 5/16 after warning of flat sequential revenues in its upcoming second quarter and earnings "within 10% to 15% of the first quarter fiscal 1998 earnings per share." Without specifying whether or not these earnings projections are higher or lower than the Q1 figure, it is safe to assume the worst. Even with today's decline, Newbridge's valuation looks dear. The company has trailing net margins of 9.87% and capital turnover of 1.35, compared with industry leader CISCO SYSTEMS (Nasdaq:CSCO - news) , which sports net margins of 21.72% and capital turnover of 1.90. Yet Newbridge's trailing earnings are valued by the maket at a 40% premium to Cisco's (based upon market capitalization and trailing net income). Yes, a company is valued based upon what it is expected to earn, but even here Newbridge trades at 35x 1998 EPS estimates of $1.43 (which will come down), while Cisco trades at 32x 1998 EPS estimates of $2.61.