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

To: Ken Moser who wrote (12104)	2/3/1998 4:55:00 PM
From: JRH	Read Replies (1) \| Respond to of 77400

<<My understanding is that the last .04 cents were artificial. A case of financial gymnastics by the accountants.>> Do you have something to support this or is it just cynical hogwash from a disgruntled short ??? That's my understanding (ggggg). Regarding Cisco and NN: Newbridge's net margins of 9.87% and capital turnover of 1.35, in comparison with industry leader Cisco's net margins of 21.72% and capital turnover of 1.90, has led many to question the company's premium earnings valuation. Newbridge traded at a 40% trailing earnings premium to Cisco (based on market capitalization and trailing net income) even after its Q2 earnings shortfall pre-announcement last November, and 35x former 1998 EPS estimates of $1.43 (while Cisco traded at 32x 1998 EPS estimates of $2.61 at that time). Today, Newbridge has sunk to trading at 13 times 1999 estimates of $1.31 per share, compared with Cisco, which trades at almost 30 times 1999 estimates of $2.17 per share. Newbridge acknowledged for the first time that competition from Cisco has hurt the company's business. Many small networking companies, once viewed as an engine of innovation and growth, have been trampled (or acquired) under the feet of Cisco-led "end-to-end" systems solutions. The admission by Newbridge today seems to solidify the notion that networking companies not in the top five in terms of market share will continue to languish, and thus far this year the going has not been good for the top five either. Sounds good for us long-time Cisco longs!!! JRH