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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Edward J. Edwards, III who wrote (41260)	3/27/1998 1:48:00 AM
From: pat mudge	Read Replies (3) \| Respond to of 61433

If this slips or if LU becomes real competition for them then these margins are going to slip. Their margins will slip as they move more into telecommunications equipment versus networking. It's a fact of life. Pat

To: Edward J. Edwards, III who wrote (41260)	3/27/1998 9:43:00 AM
From: The Phoenix	Respond to of 61433

Ted, Thanks for the post. Let me start by responding to your last statement. I will keep my money with ASND for now, but will watch csco with great interest for the future I think ASND is a good play. Again I believe, as do most on thread, that ASND has more upside potential (certainly on a % basis) than Cisco. The downside is that ASND has been more volatile and is not held in the high regard that Cisco is by analysts. Of course this could be a blessing in disguise as analysts raise ratings. I hold ASND, but I hold CSCO as well. They'll both do very well in the coming years. After reading many of your post regarding CSCO, I finally decided to do some due diligence on them. I was impressed with their BS and IS. ...... My only concern with them is their future growth rate. From CEO's own words, I believe they are going to try to maintain growth through acquisitions. Yes, I heard the same thing. Chambers is acqusition biased - no question, but he acquires companies which help the bottom line. Nearly every acquistion Cisco has made has resulted in a compounding effect for both the acquired company and Cisco. That is the sum (of revenues) has always been greater than the parts. Even the StratCom acquisition has blossomed...contrary to what some may believe. The difference between STRM versus CSCC has to do with the originating core business of the acquirers. While ASND has lost interest in their core businesses and turned towards the CSCC switching products as a foundation for the company, STRM is simply an addition to an already powerful product line. Make no mistake Cisco is very well run which is why I am attracted to it's stock. Do you know how many acquisitions they have done over the past 2 years? I'll guess rather than research.. - 20? Also, I agree with your previous statement regarding their internet sales. It is quite impressive. I believe they said nearly 8-9 million in sales daily from the internet, this was from comdex. Yes, and this number by all accounts is building!...with excellent margins. I also can see why you would be into ASND. It seems to me that CSCO is going to have a difficult time maintaining their high revenue growth as they continue to get larger. Yep. This is pretty much given. What Cisco is begining to focus on rather than revenue growth is market share growth. Even so, both are important. Cisco has shown that it can consistently grow at faster than the market rate. Unfortunately the market for networking stocks was a bit soft over the past two quarters. As build out picks up again, and IF cisco can continue increasing market share...well it's going to be a surprise! Also, note Chambers made the commnent that Cisco will be a $20B company (revenues) by 2000. This is about a 45% growth rate if he makes it. My other concern is the premium they charge on their equipment. Their profit margins are some 2.5 times industry average. If this slips or if LU becomes real competition for them then these margins are going to slip. Agreed. Could happen. Cisco has been expecting softer margins for a number of quarters. Last quarter margins actually got better...not worse! Edward, I appreciate the work you did here. I'm a beleiver in the network build-out and I think the networkers as a whole are going to do well, but there will be winners and losers. This is why I don't hold only one security in this sector - I hold many. Shoot I even bought some NN when they dipped to 20, of course I had to take some profits when they bounced to near 30, but holding LU, INTC, CSCO, ASND, CIEN, NT, etc.. for 5 years and I think you can't lose. However, holding only one of these MAY not result in the outcome that we all hope to have. Gary