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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (15695)	12/17/1997 5:28:00 PM
From: Nancy	Read Replies (1) \| Respond to of 50167

Judy, where did you get the info about JBIL's earnings make up ?

To: Judy who wrote (15695)	12/17/1997 5:53:00 PM
From: Cynic 2005	Respond to of 50167

Judy, thanks for the headsup on JBIL. I looked at the earnings and I am not at all impressed. The stock was oversold prior to earnings and hence the rebound. I am going to re-load with puts if it touches 50 again. CSCO inventory bulge (even at the low-end) could perhaps explain the strength in their earnings too. If, as he said, 20 cents came from networkers, watchout below for this stock. Yes, I expect a serious slow-down in networking business. Cisco will do better than the industry but it will not be able to command such high valuations. Nor does it help JBIL much. I know that you are trying to find-out cisco's exposure to Asia. Excluding Japan, Asia accounts for 12% of cisco sales. Not big compared to the likes of Intel. However, it is the strongest growing geographic segment for them. Other than china, they were seeing slowdown in Asia at the time of last conf. call. Things gotten better since then, didn't they? -g- Don't forget the currency exposure. However, the wall street can easily be mesmarized by words like "we grew in xx% in constant currency" or "currency related transactions have had adverse affect on the eps" etc. etc. One more thing - I am paraphrasing John Chambers words: In April he said, cisco is comfortable with the industry growth rate projections of 30-40% and they can grow more than the industry at 40-55% rate. Now their theme - "cisco is committed to 30% growth." I wouldn't call it a flip-flap. But I say the Street has not adjusted cisco valuation for this change in growth projections. The industry growth rate for 1997 is 16% and for 1996 it was 48%. Now that they openly admitted about the possibility of lesser IT spending and Y2K problem sucking up IS/IT budgets, do you really think this stock with trailing growth rate of 30% can support a PE of 50+? BTW, well done on QCOM. I made a good call on it but nothing to prove the facts in my accounts. :-( -Mohan