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

To: sepku who wrote (12444)	2/13/1998 1:13:00 PM
From: Mark Ambrose	Read Replies (1) \| Respond to of 77400

Eric, That link worked fine for me, it went directly to Jubak's article. For the record, here's the section where Cisco is discussed: ---------------------------------------------------------------------- 5. See if you can tell where future growth is going to come from. I pay special attention to this issue when the company in question is already gobbling up a dominant share of industry-wide revenues. So when I read Cisco Systems' (CSCO) recent earnings report for the quarter ended Jan. 24, 1998, I was certainly gratified to see that the company had managed to maintain its market share in key products such as routers and local area network switches. Erosion there would have been a clear "sell" sign. But the company also picked up share in a key part of the modem market -- called the remote access concentrator market -- and in the ATM switching market. Both are segments of the network business where competitors own a bigger market share. A big sale to U S West (USW) was the most splashy sign of that growth. I came away from the company's quarterly earnings report with renewed confidence in the ability of a market leader to find new growth opportunities -- something that's crucial to me as an investor, considering Cisco's price-to-earnings ratio of 50. (Cisco has been a Jubak's Pick since last Sept. 12, when I recommended it in "Catching the Cisco Express.") This isn't an exhaustive list, by any means. By reading management's discussion of a company's business, for example, you can get a good sense of where a company is vulnerable to being blindsided. Look for questions that come to you naturally but that the company isn't addressing in its press release. Management probably knows about the problem, but doesn't have the information to speak to the issue in public. You can also use a competitor's earnings report to assess the fortunes of a stock you own. Reading Cisco's statement, I would be concerned if I owned shares of Newbridge Networks (NN). Not only is Cisco coming hard into Newbridge's market -- it's also having more than a modicum of success. So come on. Stop shuffling that stack of earnings reports that you put aside to read and tackle a few. Studying them is less exciting than following the earnings horse race of the last few weeks, but it's likely to be more profitable to you in the long run.