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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (7581)11/11/1997 12:59:00 PM
From: Cynic 2005  Read Replies (6) | Respond to of 18056
 
Zeev, re - csco. First things first. A great company! But, bloated stock which is not priced for the reality. I don't understand the structural mechanics or the electrical details of a router or a switch. But I can extrapolate things from what is happening around. Also, I listened to the cisco conference call in it's entirity.

1. Yes their business WAS good. Per the company, no fundamentals changes in the business are expected. The demand picture:
...a) Europe: UK, central/east. Europe - good; Ger/Fra/Italy: Challenging!
...b) Asia (12% of total business): Challenging with the exception of China
...c) Americas - sequential improvement expected. No specifics about SA!

2. Other
...a) DSO 56 (current) vs 60 (prev.) -> NOTE this!
...b) BtB slightly above 1. -> NOTE the word "slightly."
...c) possible increase in rev. - low single digits.
...d) inventories are expected to increase.

My assessment:
...a) I expect hightech spending to decline as a whole.
...b) Asian troubles will propagate shock-waves to US high-tech though Europe
...c) A lot of market share gains are over. What next?
...d) A lot of networkers already hit the wall. It is a trend.
...e) Stock is ripe for profit taking.
...f) PE/G justifies a price of about $64. With growth rate falling to 25, @55!
...g) The stock is priced like it is. cisco is not a monopoly.
...h) The market melt-down will not help!
...i) My target - 60!

-Mohan


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